Constrained choice is relevant for households ?
Correct answer: B. making both spending and labour-supply decisions
- A. making spending decision but not labour-supply decision.
- B. making both spending and labour-supply decisions
- C. considered to be 'poor' but not for those who are considered to be 'rich'
- D. making labour-supply decisions but not spending decisions.
Explanation
Households face limited income, time, and resources in both decisions: they choose a bundle of goods within a budget and allocate available time between labour and leisure. Thus constrained choice applies to spending and labour supply.
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