If your wage increases from $10 per hour to $15 per hour, then your
A)opportunity cost of an hour of leisure decreases by $5 per hour.
B)opportunity cost of an hour of leisure increases by $5 per hour.
C)out-of-pocket cost of an hour of leisure decreases by $5 per hour.
D)out-of-pocket cost of an hour of leisure increases by $5 per hour.

Question

Quizplus · Accepted Answer

When your wage increases from $10 per hour to $15 per hour, the opportunity cost of an hour of leisure increases by $5 per hour. This is because you can now earn an additional $5 per hour by working instead of taking leisure time, hence the cost of taking leisure time has increased by $5 per hour.

If Your Wage Increases from $10 Per Hour to $15