Suppose a worker is offered a wage of $8 per hour,plus a fixed payment of $100 per day,and he can use 24 hours per day.What is the equation for the worker's opportunity set? (E is total earnings and L is leisure.)
A) E = 100 − 8L
B) E = 192 − 8L
C) E = 292 − 8L
D) None of the preceding statements is correct.

Question

Quizplus · Accepted Answer

The worker earns $8 per hour for the hours worked. If the worker takes L hours of leisure, then they work (24 - L) hours. The total earnings (E) would be the fixed payment of $100 plus $8 for each hour worked, which is $8*(24-L). Therefore, E = $100 + $8*(24-L) = $100 + $192 - $8L = $292 - $8L.

Suppose a Worker Is Offered a Wage of $8 Per