Consider an employee with a reservation wage of $6 an hour. The employee chooses an effort level between zero and one. Which of the following statements regarding her best response curve is correct? The best response curve describes the effort that the employee would choose for each level of the hourly wage. The best response curve is upward-sloping and convex. O The curve crosses the horizontal axis at the origin. The average effort per dollar is increasing in wages.

Consider an employee with a reservation wage of $6 an hour. The employee chooses an effort level between zero and one. Which of the following statements regarding her best response curve is correct? The best response curve describes the effort that the employee would choose for each level of the hourly wage. The best response curve is upward-sloping and convex. O The curve crosses the horizontal axis at the origin. The average effort per dollar is increasing in wages.

ENGR.ECONOMIC ANALYSIS

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Chapter1: Making Economics Decisions

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Question

Consider an employee with a reservation wage of $6 an hour. The employee chooses an effort level
between zero and one. Which of the following statements regarding her best response curve is
correct?
The best response curve describes the effort that the employee would choose for each level of the hourly
wage.
The best response curve is upward-sloping and convex.
The curve crosses the horizontal axis at the origin.
The average effort per dollar is increasing in wages.

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Step 1: Introduce the Concept of the Best Response Curve

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Step 2: Describe the Employee's Effort Choice

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Step 3: Analyze the Shape of the Best Response Curve (Slope and Convexity)

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Step 4: Identify the Reservation Wage Impact (Determine the Starting Point of the Curve)

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Step 5: Calculate the Average Effort per Dollar

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