Moe Has a Big Exam Tomorrow

question 65

Multiple Choice

Moe has a big exam tomorrow. He considered studying this evening, but decided to hang out with Curly instead. If neither activity involves any explicit costs, and Moe always chooses rationally, it must be true that:

• A)the opportunity cost of studying is greater than the value Moe gets from spending time with Curly.
• B)the opportunity cost of studying is less than the value Moe gets from spending time with Curly.
• C)Moe gets more benefit from spending time with Curly than from studying.
• D)Moe gets less benefit from spending time with Curly than from studying.

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Definitions:

Payroll Tax

Taxes imposed on employers or employees, usually calculated as a percentage of the salaries that employers pay their staff.

Labor Market

The supply and demand for labor, where workers find employment and employers find workers.

Equilibrium

A state in economics where demand equals supply, resulting in a stable market price and quantity.

Take Home Pay

The amount of income left after deductions such as taxes and retirement contributions are taken out of an individual's gross salary.