If an Individual Is Maximizing His or Her Utility,his or Her

question 16

Multiple Choice

If an individual is maximizing his or her utility,his or her marginal rate of substitution of leisure hours for consumption will be:

• A)equal to one divided by his or her wage rate.
• B)greater than one divided by his or her wage rate.
• C)equal to his or her wage rate.
• D)less than his or her wage rate.

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Definitions:

Positive Amount

A value greater than zero, often used in financial and mathematical contexts to denote an increase or positive quantity.

Total Cost Functions

Mathematical representations that describe how the total cost of production changes as the output level varies.

Market Price

The existing rate at which an asset or service can be acquired or disposed of in a trading environment.

Technology

The application of scientific knowledge for practical purposes, especially in industry, which drives innovation, efficiency, and the development of new products and processes.