Scenario: This Problem Applies the Principle of Optimization Covered in Chapter

question 110

Multiple Choice

Scenario: This problem applies the principle of optimization covered in Chapter 5 to the problem of choosing how many hours to work. Paul has to decide how many hours to work per day. His boss is willing to give Paul whatever hours Paul wants up to 8 hours. All else being equal, he would rather not work, that is, Paul has positive marginal benefit from each hour of leisure. But he is an avid collector of presidential campaign buttons. The more leisure he takes, the fewer buttons he can afford. So Paul faces a trade-off between leisure and buttons. Each button costs $1.00. The table below shows Paul's marginal benefits from leisure (MBlₑᵢsᵤᵣₑ) and buttons (MBbᵤttₒn) .

-Refer to the scenario above.If the hourly wage is $1.60,how many hours would Paul choose to work? How many buttons would he buy?

• A) 2 hours; 12 buttons
• B) 3 hours; 4 buttons
• C) 4 hours; 5 buttons
• D) 5 hours; 8 buttons

---

Definitions:

Tech Support

Assistance provided by companies to consumers facing technical problems or issues with electronic devices or software.

Time-Driven

Refers to activities or systems where performance or output is measured in relation to the amount of time taken to complete them.

Activity-Based Costing

Accounting practice that assigns costs to products or services based on the precise resources they consume, offering more accuracy in costing.

Receiving Calls

The action or process of answering or accepting incoming telephone calls.