Liana Consumes Only Beer and Chips

question 117

Multiple Choice

Liana consumes only beer and chips. Her indifference curves are all bowed inward. Consider the bundles (2,6) , (4,4) , and (6,2) . If Liana is indifferent between (2,6) and (6,2) , then Liana must

• A)prefer (4,4) to (6,2).
• B)be indifferent between (4,4) and (6,2).
• C)prefer (6,2) to (4,4).
• D)prefer (2,6) to (4,4).

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Definitions:

Labor Market

The supply and demand for labor, where employers seek to hire workers and workers look for employment.

Capital

Financial assets or the financial value of assets, such as cash and buildings, used by a business to produce goods and services.

Human Labor

This is the effort contributed by humans in the production process, including physical and intellectual contributions.

Marginal Productivity Theory

An economic theory that suggests that the amount of compensation or wage received by a resource (like labor) is determined by its marginal productivity or the additional output generated by using one more unit of the resource.