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

question 85

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 increases from $1.00 to $1.60,Paul would choose to work ________.

• A) more hours
• B) the same number of hours
• C) fewer hours
• D) as much as he can (8 hours)

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Definitions:

Obesity

A medical condition characterized by excess body fat accumulation to the extent that it may have a negative effect on health, leading to reduced life expectancy and increased health problems.

Indicates

Suggests or implies something as a sign or symptom of a particular condition or situation.

Pancreatic Protease

Enzymes produced by the pancreas that break down proteins into smaller peptides.

Amylase

An enzyme that catalyzes the hydrolysis of starch into sugars.