Mr Cog in Problem 7 Has 18 Hours a Day

question 15

Multiple Choice

Mr. Cog in Problem 7 has 18 hours a day to divide between labor and leisure. If he has 9 dollars of nonlabor income per day and gets a wage rate of 15 dollars per hour when he works, his budget equation, expressing combinations of consumption and leisure that he can afford to have, can be written as

• A) C = 279 + 15R.
• B) 15R + C = 9.
• C) 15R + C = 279.
• D) R += 369.
• E) C = 306 + 15R.

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Definitions:

Microfinance

A type of financial service provided to unemployed or low-income individuals or groups who otherwise lack access to traditional banking services.

Collateral

An asset that a borrower offers to a lender as a security for a loan, which can be seized if the loan is not repaid.

Savings Deposits

Bank accounts that pay interest on the money deposited, meant for saving rather than daily transactions.

Capital Formation

The process of building up a country's stock of real capital, such as buildings, machinery, and equipment, which is used for production.