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 statements is correct.

Question

Quizplus · Accepted Answer

The worker can work up to 24 hours, earning $8 per hour, plus a fixed payment of $100. The maximum earnings if working all 24 hours is 24*8 + 100 = 292. The opportunity set equation is E = 292 - 8L, where L is leisure hours.

Suppose a Worker Is Offered a Wage of $8 Per