When labor suppliers choose how much time to allocate to wage labor and to other activities seeking to maximize utility ,their constraint is given by
A) the time constraint S + H ≤ T
B) the cash constraint that C ≤ wS + M.
C) C + wH ≤ wT + M.
D) all of the above.

Question

Quizplus · Accepted Answer

The correct answer is D) all of the above. Each of the constraints represents a different aspect of the decision-making process for labor suppliers. A) represents the time constraint, where S is leisure time, H is hours worked, and T is the total available time. B) represents the cash constraint, where C is consumption, w is the wage rate, S is leisure time, and M is non-labor income. C) is a combination of the wage rate, total time, and non-labor income constraints, showing how consumption and hours worked are limited by these factors.

When Labor Suppliers Choose How Much Time to Allocate to Wage