Use the Following to Answer Questions

question 7

Multiple Choice

Use the following to answer questions :
Figure: Rita's Time Allocation Budget Line
-(Figure: Rita's Time Allocation Budget Line) Look at the figure Rita's Time Allocation Budget Line.It is based on 80 hours available for labour and leisure.Rita chooses 40 hours of leisure and an income of $280.When her hourly wage doubles,Rita chooses 50 hours of leisure and an income of $420.The substitution effect is making her work _____,the income effect is making her work _____,and the substitution effect is _____ than the income effect.

• A) more;less;stronger
• B) less;more;stronger
• C) more;less;weaker
• D) less;more;weaker

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Definitions:

Earnings Quality

An assessment metric that evaluates the degree to which a company's earnings are derived from sustainable sources and are repeatable, controllable, and bankable.

Multi-Step Income

Multi-step income statements provide a detailed breakdown of revenues, expenses, and profit, distinguishing between operating and non-operating activities.

Cash Flow Statement

A document highlighting the impact of adjustments in balance sheet items and earnings on cash and cash equivalents, divided into operating, investing, and financing sections.

Abnormal Earnings

The profits that exceed or fall short of the expected normal rate of return for a business.