Fixed Costs of Working Act Like

question 35

Multiple Choice

Fixed costs of working act like

• A) a pure substitution effect.
• B) a pure income effect.
• C) a combination of both a substitution and an income effect.
• D) neither a substitution nor an income effect.

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Definitions:

Leisure

Free time available to a person for relaxation, entertainment, or hobbies, not taken up by work or essential domestic activities.

Marginal Utility

The additional satisfaction or benefit (utility) that a consumer derives from buying an additional unit of a commodity or service.

Total Utility

The complete satisfaction or pleasure a consumer obtains from consuming a given quantity of goods or services.

Indifference Curve

A graph showing different bundles of goods between which a consumer is indifferent, reflecting their preferences for certain combinations of goods.