You have a part time job that pays 8 per hour Your manager h

You have a part time job that pays $8 per hour. Your manager has asked you to work 4 extra hours on Friday night, but you already have plans for dinner and a movie with a friend on Friday night. Under what conditions will you choose to work on Friday night? Consider the economic way of thinking in answering this question; also assume that you are rational (even if you do not think you are rational) and can afford dinner and a movie. You value the Friday night activities more than the extra pay (in terms of marginal benefits, marginal costs and your utility). You have already seen the movie that has been chosen for Friday night. You value the extra pay more than the Friday night activities (in terms of marginal benefits, marginal costs, and your utility). You think the Friday night dinner will be expensive.

Solution

c. you value the extra pay more than the friday night activity in temrs of marginal benefits, marginal cost and your utility

if MB>MC (here MB = $32 and MC is not knows) and it is more than utility forgone you will choose to do overtime