The condition MRS1,C = w describes the representative consumer's
A)current period work-leisure decision.
B)future period work- leisure decision.
C)future consumption-savings decision.
D)current consumption-savings decision.
E)investment decision.

Question

Quizplus · Accepted Answer

MRS1,C is the marginal rate of substitution between consumption and leisure in the current period, and w is the wage rate. Therefore, the condition MRS1,C = w describes the representative consumer's current period work-leisure decision, which is choice A.

The Condition MRS1,C = W Describes the Representative Consumer's