In the Labour Market, the Optimal Number of Work Hours

question 53

Multiple Choice

In the labour market, the optimal number of work hours is determined when:

• A)the MRS of income for leisure is the wage.
• B)the MRS of income for consumption is the wage.
• C)the MRS of leisure for consumption is the wage.
• D)total utility is maximized.

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Definitions:

Average Total Cost

The total cost of production divided by the number of units produced, representing the cost per unit of output.

Market Price

The present cost at which a product or service is available for purchase or sale in a market.

Market Price

The current price at which an asset or service can be bought or sold in the marketplace.