You have a part time job that pays $8 per hour. Your manager has asked you to wo

Question

You have a part time job that pays $8 per hour. Your manager has asked you to work 4 extra hours on Friday night, but you already have plans for dinner and a movie with a friend on Friday night. Under what conditions will you choose to work on Friday night? Consider the economic way of thinking in answering this question; also assume that you are rational (even if you do not think you are rational) and can afford dinner and a movie.

A)You value the Friday night activities more than the extra pay (in terms of marginal benefits, marginal costs, and your utility).

B ) You think the Friday night dinner will be expensive.

C You have already seen the movie that has been chosen for Friday night.

DYou value the extra pay more than the Friday night activities (in terms of marginal benefits, marginal costs, and your utility).

Explanation / Answer

Economically, consumers are rational decision makers and go for options which give them maximum profits.

In the given case, the person has to decide between going for dinner and working extra.

The only time he will accept working extra is when he is paid enough to compensate for the loss of dinner. This is rational decision making.

Thus, the correct option is: (D) You value the extra pay more than the Friday night activities (in terms of marginal benefits, marginal costs, and your utility).

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