In the two-period utility maximization model the opportunity cost ...

[Beheh]

In the two-period utility maximization model the opportunity cost of one unit of C1 is
 a. one unit of C0.
  b. 1 + r units of C0.
  c. 1/(1 + r) units of C0.
  d. cannot be determined without more information.

Question 2

The fact that more women have chosen to work as real wages rise is evidence that, for them
 a. leisure is an inferior good.
  b. income and substitution effects of higher real wages work in the same direction.
  c. income and substitution effects of higher real wages may work in opposite directions.
  d. income and substitution effects may work in opposite directions but that the substitution effect is stronger.

[Pariscourtney]

Answer to Question 1

c

Answer to Question 2

d