O The MRS is the trade-off between grain and free time that Angela is constrained to make. O At a point to the left of Angela's optimal choice, the MRS is smaller than the MRT. At a point to the right of Angela's optimal choice, she is less willing to trade grain for free time than at her optimal choice. O Since all Angela's indifference curves have the same MRS at 16 hours of free time, any choice of grain at 16 hours of free time is optimal.

O The MRS is the trade-off between grain and free time that Angela is constrained to make. O At a point to the left of Angela's optimal choice, the MRS is smaller than the MRT. At a point to the right of Angela's optimal choice, she is less willing to trade grain for free time than at her optimal choice. O Since all Angela's indifference curves have the same MRS at 16 hours of free time, any choice of grain at 16 hours of free time is optimal.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Based on the figure below, which of the following is correct?
Bushels of grain
0
0
12-
C
16
Angela's hours of free time
MRS - MRT
24
Angela's indifference
curves
Angela's feasible
frontier
O The MRS is the trade-off between grain and free time that Angela is constrained to make.
At a point to the left of Angela's optimal choice, the MRS is smaller than the MRT.
At a point to the right of Angela's optimal choice, she is less willing to trade grain for free time than at her optimal
choice.
O Since all Angela's indifference curves have the same MRS at 16 hours of free time, any choice of grain at 16 hours
of free time is optimal.

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