Steve and Don are neighbours who work at the same firm and hold the same title.Steve finds that when Don's consumption rises,he feels worse off.Don feels the same way towards Steve's consumption.
-Refer to the information above.Suppose that the firm that employs both Don and Steve begins to offer one hour of overtime.It is likely that
A) Don will work more but not Steve.
B) Steve will work more but not Don.
C) neither Don nor Steve will work more.
D) both Don and Steve will work more.
E) both Don and Steve will work less.

Question

Quizplus · Accepted Answer

Since Steve and Don hold the same title and work at the same firm, it is likely that the overtime offer will apply to both of them equally. Also, since both of them feel worse off when the other consumes more, they are likely to view the overtime offer as an opportunity to increase their consumption and improve their well-being. Therefore, it is reasonable to expect that both Don and Steve will choose to work more hours in order to take advantage of the overtime offer.

Steve and Don Are Neighbours Who Work at the Same