Refer to the Following Information $\begin{array}{cc}{\text { Wage }} & \text { Output per Worker } \\\hline{\$ 10}&20\\9 & 20 \\8 & 16 \\7 & 10 \\\end{array}$

question 47

Multiple Choice

refer to the following information. Suppose a “fully effective” worker can produce 20 units per hour in a particular firm. The firm’s wage-productivity relationship is given by the table below:


$\begin{array}{cc}{\text { Wage }} & \text { Output per Worker } \\\hline{\$ 10}&20\\9 & 20 \\8 & 16 \\7 & 10 \\\end{array}$
-If the actual wage is $7,the wage cost per effective unit of labor is:

• A)$3.50
• B)$10.00
• C)$7.00
• D)$14.00

---

Definitions:

Revealed Preference

A theory that determines consumer preferences based on observing their choices and behavior, assuming consistency in their decision-making.

Prices

The monetary value assigned to goods and services, determining the terms of exchange in a market.

Bundles

Combinations of goods and services offered together as a single package, often at a discounted price.

Weak Axiom

A principle in consumer theory that if a consumer prefers bundle A over bundle B when both are affordable, they will not choose B over A when income or prices change, holding everything else constant.