If a person's marginal utility from an additional hour of leisure is less than the marginal utility gained from goods bought with the wages earned from an additional hour of labor,then this person should:
A)continue to work the hours he or she is working.
B)work less since he or she is working more than the optimal number of hours.
C)work more since he or she is working less than the optimal number of hours.
D)quit work since he or she is not earning enough to satisfy his or her time allocation.

Question

Quizplus · Accepted Answer

The principle of marginal analysis suggests that individuals maximize their utility by equating the marginal utility of leisure with the marginal utility of goods and services bought with wages. If the marginal utility from an additional hour of leisure is less than the marginal utility from goods bought with wages earned from an additional hour of labor, it implies that working more will increase the person's overall utility. Therefore, the person should work more.

If a Person's Marginal Utility from an Additional Hour of Leisure