How does the labor-leisure trade-off determine the supply of labor?
What will be an ideal response?
Non-work activities are labeled "leisure." Time that is not spent on leisure will be spent on work. So, the price of leisure, in terms of its opportunity cost, is the lost wages from not working. Individuals would consume leisure up to the point where the marginal benefit from leisure equals the marginal cost, where the marginal cost is the wage rate.
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A major stumbling block to the completion of the Uruguay Round was a disagreement between the United States and the EU over rules covering international trade in
A) services. B) steel. C) agricultural products. D) textiles.
If a seller lowers the price of a product when demand is price inelastic, the seller can expect revenues to
A) rise. B) fall. C) stay the same. D) either rise or fall, but it is impossible to determine which.