Marla Will Make $10 by Tutoring for an Additional Hour,but

question 151

Multiple Choice

Marla will make $10 by tutoring for an additional hour,but she will lose an hour of studying for her economics test.Marla decides to study,rather than tutor.Marla's choice indicates that she:

• A)values an additional hour of studying more than the $10 she would earn tutoring.
• B)values an hour of studying less than the $10 she would earn tutoring.
• C)does not understand that there is no benefit from studying.
• D)doesn't need the money.

---

Definitions:

Budget Constraints

Constraints that consumers face as a result of limited incomes.

Endowment Effect

Tendency of individuals to value an item more when they own it than when they do not.

Reference Point

A basis or standard for evaluation, comparison, or judgment.

Original Endowment

The initial allocation of income, wealth, resources, or goods that an individual or economy possesses before engaging in trade or production activities.