Problem
1. Why does a worker allocate his or her time over the life cycle so as to work more hours in those periods when the wage is highest? Why does the worker not experience an income effect during those periods?
2. What is the added worker effect? What is the discouraged worker effect? Which effect dominates in the United States?
3. Who are the hidden unemployed? Should the hidden unemployed be included in the calculation of the unemployment rate? Why or why not?