1. Refer to graph (multiple choice) graph represents Cara's budget constraint and preferences A. Refer to Graph, Which of the statements below is the most accurate? a. At point A, Cara's marginal valuation of leisure is higher than the market wage b. At point B, Cara's marginal valuation of leisure is higher than the market wage. c. At point B, Cara values leisure the same amount as at point A. d. At point A, Cara's marginal valuation of leisure is higher than the market wage, and at point B, Cara values leisure the same amount as at point A. B. Refer to Graph, At point A, Cara’s marginal rate of substitution of leisure for income a. exceeds the wage and Cara would like to work fewer hours. b. is less than the wage and Cara would like to work more hours. c. exceeds the wage and Cara would like to work more hours. d. is less than the wage and Cara would like to work fewer hours. C. Refer to Graph, Based on the graph above, we can conclude that a. Cara does not have any non-income wealth and she is spending less hours on leisure than work. b. Cara does not have any non-income wealth and she is spending more hours on leisure than work. c. Cara does have non-income wealth and she is spending less hours on leisure than work. d. Cara does have non-income wealth and she is spending more hours on leisure than work.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. Refer to graph (multiple choice) graph represents Cara's budget constraint and preferences

A. Refer to Graph, Which of the statements below is the most accurate?

a. At point A, Cara's marginal valuation of leisure is higher than the market wage

b. At point B, Cara's marginal valuation of leisure is higher than the market wage.

c. At point B, Cara values leisure the same amount as at point A.

d. At point A, Cara's marginal valuation of leisure is higher than the market wage, and at point B, Cara values leisure the same amount as at point A.

B. Refer to Graph, At point A, Cara’s marginal rate of substitution of leisure for income

a. exceeds the wage and Cara would like to work fewer hours.

b. is less than the wage and Cara would like to work more hours.

c. exceeds the wage and Cara would like to work more hours.

d. is less than the wage and Cara would like to work fewer hours.

C. Refer to Graph, Based on the graph above, we can conclude that

a. Cara does not have any non-income wealth and she is spending less hours on leisure than work.

b. Cara does not have any non-income wealth and she is spending more hours on leisure than work.

c. Cara does have non-income wealth and she is spending less hours on leisure than work.

d. Cara does have non-income wealth and she is spending more hours on leisure than work.

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