When labor suppliers choose how much time to allocate to wage labor and to other activities seeking to maximize utility ,their utility is often assumed to be a function of ________.
A) consumption of goods and services
B) time spent in non-labor activities.
C) both consumption of goods and services and time spent in non-labor activities.
D) neither consumption of goods and services nor time spent in non-labor activities.

Question

Quizplus · Accepted Answer

Labor suppliers' utility is likely to be influenced by both their consumption of goods and services as well as the amount of time they spend on non-labor activities. For example, they may choose to work more and earn higher wages in order to afford more goods and services or to take more leisure time for personal enjoyment. Therefore, both consumption and leisure time are important factors that affect labor supply decisions.

When Labor Suppliers Choose How Much Time to Allocate to Wage