For a Worker Who Is Deciding How Many Hours of Labour

question 24

Multiple Choice

For a worker who is deciding how many hours of labour to supply, all of the following are true except that:

• A) The marginal rate of substitution between income and leisure is equal to the wage rate.
• B) The income effect of a wage change equals the substitution effect.
• C) The rate at which she is willing to exchange leisure for income equals the rate at which the market allows her to do it.
• D) The worker cannot increase total utility by working more or fewer hours.
• E) The slope of the budget line equals the slope of the indifference curve.

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Definitions:

Non-Controlling Interest

A share of equity ownership in a subsidiary or joint venture which is not large enough to exercise control over the entity.

Impairment Loss

A decrease in an asset's recoverable amount below its carrying amount, leading to a write-down of the asset's value on the balance sheet.

Gross Margin

The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage; it measures the profitability of selling goods.

Cost Method

An accounting method used to value investments, where the investment is recorded at cost and adjustments are made for dividends received or additional investments made.