The marginal rate of substitution is the slope of the budget constraint

On the graph above, suppose the labor market is in equilibrium at point 2, then the demand curve shifts down to the position shown on the graph

If the real wage has not changed, then the horizontal distance between points ________ measures the unemployment that results. A) 2 & 4 B) 2 & 1 C) 3 & 4 D) 6 & 4

Zelda won the jackpot on a penny slot machine in Las Vegas and is given the following three options to receive her jackpot:

Option 1: $100,000 to be received right away, with four additional payments of $100,000 to be received each year for the next four years. Option 2: $250,000 to be received right away with two additional payments of $100,000 to be received each year for the next two years. Option 3: $400,000 to be received right away. Which option should Zelda choose if the interest rate is 8%? Would she choose the same option if the interest rate was 10%? Why?