Susan Chen is a stock analyst. She values two goods: money (income) and her integrity. Her bonus is based on the number of investments she recommends to the company. Generally speaking, the higher the bonus she receives, Question 7 options: the smaller is the shift in her budget line. the more she is willing to trade off her integrity for money. the more she is indifferent to changes in the level of bonus. the less she is willing to trade off her integrity for money.

The more she is willing to trade off her integrity for money

Explanation:

An indifference curve represents different combinations of two goods which a consumer can have, which shall yield same level of satisfaction.

Opportunity cost in case of two goods, refers to the units sacrificed or traded off of one good so as to consume more units of the other good.

In the given case, the analyst is faced with the trade off between two sources of utility or satisfaction i.e money and integrity. So if the individual wants more of one, she has to sacrifice some part of other.

Since her bonus is based upon number of investments she recommends to the company, if she'll be honest or focuses upon integrity, justness and fairness, her number of recommended investments would be lesser in comparison to the number of recommended investments if she is dishonest.

So, the higher the bonus she receives, means more the number of investments recommended by her which implies lesser integrity.

So, the higher the bonus she receives, the more she is willing to trade off her integrity for money.

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