Suppose earnings are given by E = $60 + $7(24 − L),where E is earnings and L is the hours of leisure.What is the price to the worker of consuming an additional hour of leisure?
A) $24
B) $7
C) $12
D) $10

Question

Quizplus · Accepted Answer

The price to the worker of consuming an additional hour of leisure is equal to the decrease in earnings by taking that hour off. In the given equation, the coefficient of L is -7, which means that for every hour of leisure taken, earnings decrease by $7. Therefore, the answer is B, $7.

Suppose Earnings Are Given by E = $60 + $7(24