What happens to hours of work when non-labor income decrease

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a. What happens to hours of work when non-labor income decreases? Does such a non-labor income change generate a substitution effect?

b. Why might we expect welfare programs create work disincentives?

c. What happens to the probability that a particular person works when the wage rises? Does such a wage increase generate an income effect?

Reference no: EM13798710

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