Matt is offered a job driving the campus shuttle bus from 4 P.M.to 6 P.M.each Monday.His reservation wage for this job is $7/hour.
Now suppose the director offers Matt $50/hour,but also announces that the earnings from the job will be divided equally among Matt and the 99 other students who live in Matt's dorm.Will Matt still accept this job?
A) Yes,accepting the job means a positive surplus for Matt.
B) No,accepting the job means a negative surplus for Matt.
C) Yes,although accepting the job means a negative surplus for Matt,still it's better than having no job.
D) No,although accepting the job means a positive surplus for Matt,still it's not the best option for him.
Correct Answer:
Verified
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