For a worker,the opportunity cost of an hour of leisure:
A) is determined by factors that are unrelated to his or her hourly wage.
B) is the same for a corporate chief executive officer as it is for a restaurant waiter.
C) falls by $10 when his or her wage rises by $10 per hour.
D) rises by $10 when his or her wage rises by $10 per hour.
E) depends on the tastes and preferences of the worker.

Question

Quizplus · Accepted Answer

The opportunity cost of an hour of leisure is the wage that could be earned if that time was used for work instead. Therefore, if the worker's hourly wage rises by $10, the opportunity cost of an hour of leisure also rises by $10. Hence, option D is correct. Option A is incorrect because the opportunity cost is directly related to the hourly wage. Option B is incorrect because the opportunity cost differs based on the worker's wage. Option C is also incorrect because the opportunity cost of an hour of leisure rises when the wage increases, not falls. Option E is incorrect because the worker's preferences may affect the utility they derive from leisure, but it doesn't affect the opportunity cost.

For a Worker,the Opportunity Cost of an Hour of Leisure