Problem
1. What happens to the reservation wage if nonlabor income increases, and why?
2. What economic factors determine whether a person participates in the labor force?
3. How does a typical worker decide how many hours to allocate to the labor market?
4. What happens to hours of work when nonlabor income decreases?
5. What happens to hours of work when the wage rate falls? Decompose the change in hours of work into income and substitution effects.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.