Gabriella Often Faces a Trade-Off Between Time at the Beach

question 279

Multiple Choice

Gabriella often faces a trade-off between time at the beach and time working as a model.She earns $40 per hour as a model and values going to the beach at the same price.When explaining this to her parents,she says,"The marginal utility per hour working is the same as the marginal utility per hour of going to the beach." This example illustrates:

• A)indifference curves.
• B)the substitution effect.
• C)the income effect.
• D)optimal time allocation.

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Definitions:

Demand

The measure of a good or service that patrons are eager and able to procure, across various pricing, throughout a certain duration.

Price Ceiling

A legally established maximum price for a good, or service. Normally set at a price below the equilibrium price.

Sellers

Individuals or entities that offer goods or services for sale in the market, playing a key role in determining the supply conditions.

Surplus

When the quantity of a good or service supplied exceeds the quantity demanded at the current price.