Gabriella Often Faces a Trade-Off Between Time at the Beach

question 279

Multiple Choice

Gabriella often faces a trade-off between time at the beach and time working as a model.She earns $40 per hour as a model and values going to the beach at the same price.When explaining this to her parents,she says,"The marginal utility per hour working is the same as the marginal utility per hour of going to the beach." This example illustrates:

• A)indifference curves.
• B)the substitution effect.
• C)the income effect.
• D)optimal time allocation.