The marginal rate of substitution of future leisure for future consumption must be equal to
A)the relative price of current consumption in terms of future consumption.
B)the future real wage.
C)one.
D)savings in the current period.
E)the real interest rate.

Question

Quizplus · Accepted Answer

The marginal rate of substitution of future leisure for future consumption must be equal to the future real wage. This is because the future real wage represents the opportunity cost of leisure in terms of foregone future consumption.

The Marginal Rate of Substitution of Future Leisure for Future