Consider a Worker Who Dislikes Working End Enjoys Consuming a Composite

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The Answer is D
The graph below shows an indifference curve that satisfies convexity here -- A and B are indifferent,and C is the average of the two.C has more consumption (that the worker likes)and less labor (which the worker does not like)then D --- and thus C is preferred to D.Since D is indifferent to A and B,we therefore have the average C being preferred to the extremes A and B.We also see that the more preferred bundles lie to the northwest -- with more consumption and less labor.Finally,a tax on wages has nothing to do with how a worker feels about consumption and working --- a tax on wages affects the worker's budget,not his tastes.

D The graph below shows an indifference curve that satisfies convexity here -- A and B are indifferent,and C is the average of the two.C has more consumption (that the worker likes)and less labor (which the worker does not like)then D --- and thus C is preferred to D.Since D is indifferent to A and B,we therefore have the average C being preferred to the extremes A and B.We also see that the more preferred bundles lie to the northwest -- with more consumption and less labor.Finally,a tax on wages has nothing to do with how a worker feels about consumption and working --- a tax on wages affects the worker's budget,not his tastes.

Consider a Worker Who Dislikes Working End Enjoys Consuming a Composite

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