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1 June, 22:15

A worker is indifferent between job one lasting 4 hours a day, job two lasting 8 hours a day, and job three lasting 12 hours a day. Job two pays $10 an hour and tangency between the indifference curve and the budget constant occurs at 8 hours. One can conclude that

a. job one pays less per day but more per hour.

b. job three pays more per day and more per hour.

c. both A and B are true

d. neither A nor B are true

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  1. 1 June, 22:43
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    both (a) and (b) are true

    That is:

    a. job one pays less per day but more per hour.

    b. job three pays more per day and more per hour.

    Explanation:

    An indifference curve is one that shows all combinations of a good or activity that gives the same level of satisfaction to the consumer, and so the consumer is indifferent.

    In this instance the worker is indifferent between job one lasting 4 hours a day, job two lasting 8 hours a day (pays $10 an hour), and job three lasting 12 hours a day.

    For the worker to be indifferent job one must pay more per hour and less per day. Whole job 3 wi pay more per day and more per hour.
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