Use the Following to Answer Questions

question 355

Multiple Choice

Use the following to answer questions:
Figure: Income and Leisure Opportunities
-(Figure: Income and Leisure Opportunities) The figure Income and Leisure Opportunities refers to Keisha when she has 100 hours per week for working or leisure. There are two time allocation lines, one for a $10 hourly wage rate and one for a $20 hourly wage rate. Keisha's optimal choice is point A when the wage is $10, and her optimal choice is point C when the wage is $20. As the amount she earns increases from $10 to $20 per hour, Keisha will work _____ hours because of the substitution effect.

• A) 10 fewer
• B) 15 more
• C) 25 fewer
• D) 50 more

---

Definitions:

Dividends

Payments made by a corporation to its shareholder members, typically out of the company's profits.

Price-earnings Ratio

A valuation metric for a stock, calculated by dividing the current share price by the earnings per share.

Net Income

Net income represents the total earnings of a company after all expenses and taxes have been deducted from total revenue.

Common Stock

Shares of ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.