Matt is offered a job driving the campus shuttle bus from 4 p.m. to 6 p.m. each Monday. His reservation wage for this job is $7 per hour. Now suppose the director offers Matt $50 per hour, but also announces that the earnings from the job will be divided equally among Matt and four other students. Will Matt accept this job?
A. Yes, because $50 divided by five is greater than Matt's reservation wage.
B. No, because it is not fair for Matt to do the work and then have to share the wage.
C. No, because the other students are free riders.
D. Yes, because Matt believes in the Rawlsian theory of justice.
Answer: A
You might also like to view...
Economic surplus
A) is equal to the difference between consumer surplus and producer surplus. B) is equal to the sum of consumer surplus and producer surplus. C) does not exist when a competitive market is in equilibrium. D) is the difference between quantity demanded and quantity supplied when the market price for a product is greater than the equilibrium price.
A commodity money standard exists when exchange rates are:
a. artificially pegged to the price of oil. b. fixed in terms of gold, thus creating flexible exchange rates between countries. c. fixed in terms of gold, thus creating fixed exchange rates between countries. d. allowed to fluctuate based on the values of different currencies. e. fixed, based on the values of different currencies, in terms of some commodity.