The basic premise behind worker trade-offs in a market economy is that:
A) firms decide how much workers must work and workers decide how much leisure to have.
B) workers don't decide how much leisure to have. The amount of leisure depends on the number of hours they must work, which is determined by the firm.
C) workers decide how to allocate their time between work and leisure.
D) the trade-off between work and leisure is determined by factors other than what workers or firms would determine to be optimal.

Question

Quizplus · Accepted Answer

In a market economy, workers are free to choose how much of their time they want to allocate to work and how much to leisure. The workers' decision is based on their own preferences and trade-offs between income and leisure. However, firms may also offer incentives such as higher wages or better working conditions to encourage workers to work longer hours. Nonetheless, the final decision remains with the workers.

The Basic Premise Behind Worker Trade-Offs in a Market Economy