Workers typically require higher wages in order to work additional hours because of the
A)Increasing opportunity cost of labor.
B)Increasing marginal utility of income.
C)Decreasing value of leisure time forgone.
D)Constant marginal utility of income.

Question

Quizplus · Accepted Answer

As workers work more hours, their leisure time decreases which increases the opportunity cost of their labor. Therefore, workers require higher wages to compensate for this increasing opportunity cost. Option B is not relevant in this context as it refers to the satisfaction obtained from higher income, which is not necessarily the reason why workers demand higher wages for extra hours. Option C is incorrect as it refers to the decreasing value of leisure time as workers take on more work hours, which is opposite to what actually happens as leisure time decreases in this scenario. Option D is also incorrect as it assumes a constant marginal utility of income for all individuals, which is not necessarily true.

Workers Typically Require Higher Wages in Order to Work Additional