QUESTION 14

Which of the following is true of how markets react to government intervention? They react

1. to provide the intended results.
2. in ways that offset intended impacts.
3. quickly to reverse intended effects.
4. in completely unpredictable ways.
5. so slowly that policies never work as they are intended.

QUESTION 9

The fact that we observe negatively sloped market labor supply curves implies that

1. the substitution effect is weaker that the income effect for most workers.
2. the income effect is weaker than the substitution effect for most workers.
3. most workers don't have income or substitution effects.
4. the income effect plus substitution effect results in the positive slope.
5. labor laws require workers to work at least 40 hours per week.