Scott's wage is $25 per hour and he works 50 hours a week,which is his optimal labour supply at that wage.His marginal utility of 1 hour of leisure is equal to the:
A) marginal utility he gets from $25 worth of goods.
B) marginal utility he gets from more than $25 worth of goods.
C) marginal utility he gets from less than $25 worth of goods.
D) substitution effect.

Question

Quizplus · Accepted Answer

The marginal utility of 1 hour of leisure is equal to the marginal utility he gets from $25 worth of goods because $25 is the wage he foregoes for an hour of leisure.

Scott's Wage Is $25 Per Hour and He Works 50