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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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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