Ramona and Clio Both Work for the Megabux Corporation and Perform

question 122

True/False

Ramona and Clio both work for the Megabux Corporation and perform similar jobs. They earn the same wage rate, and Megabux provides them with the same dollar value of benefits. But Ramona (who has young children) has opted to spend most of her benefit dollars on childcare, while Clio is using hers to pay for tuition at a local community college to take a variety of classes. The fact that Megabux offers these options suggests that it provides a cafeteria-style benefits program.

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Definitions:

DVD Players

Electronic devices designed to play discs in the DVD format, capable of producing both sound and video from digital optical disc storage.

Income Elasticity

A measure of how much the demand for a product or service changes relative to a change in consumers' income levels.

Normal Good

A good for which demand increases as the income of consumers increases and decreases as the income of consumers decreases.

Price Elastic

Pertains to a measurement in economics of how responsive an economic variable's quantity is to a change in its price.