Reservation wage and marginal rate of substitution

timer Asked: Jun 1st, 2014

Question description

1.A maximizing worker with preferences U = FZ with property income of $60 per day will have a

reservation wage equal to,

a) $60.00

b) $12.00

c) $2.50

d) none of these.

2. A saver who has a small marginal rate of substitution is,

a) patient.

b) paradoxical.

c) irrational.

d) not patient.

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