A simple income-leisure model might predict that salaried workers would work fewer hours than hourly workers.In fact the opposite seems to be true,in part because:
A)raises and promotions are "won" on the basis of productivity rankings
B)firms typically offer raises and promotions solely on the basis of seniority
C)of the principle-agent problem
D)salaried work is an example of a deferred compensation scheme

Question

Quizplus · Accepted Answer

Salaried workers are often evaluated and compensated based on their productivity and efficiency, rather than the number of hours they work. Therefore, they may work longer hours to demonstrate their value and improve their chances of receiving promotions and raises. This is consistent with the income-leisure model, which predicts that individuals will work more to increase their income when the marginal benefits of additional income are higher than the marginal costs of additional leisure.

A Simple Income-Leisure Model Might Predict That Salaried Workers Would