The income effect describes the:
a. incentive to work more when the wage rises.
b. incentive to work less when the wage rises.
c. decision whether to join the labor force.
d. decision to ask for a raise.
e. incentive to change jobs.

rational decision making is a multi-step process for making choices between alternatives. the process of rational decision making favors logic, objectivity, and analysis over subjectivity and insight. the word “rational” in this context does not mean sane or clear-headed as it does in the colloquial sense.

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