If a Person's Marginal Utility from an Additional Hour of Leisure

question 305

Multiple Choice

If a person's marginal utility from an additional hour of leisure is less than the marginal utility gained from goods bought with the wages earned from an additional hour of labor,then this person should:

• A)continue to work the hours he or she is working.
• B)work less since he or she is working more than the optimal number of hours.
• C)work more since he or she is working less than the optimal number of hours.
• D)quit work since he or she is not earning enough to satisfy his or her time allocation.

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Definitions:

Initial Recognition

The process of recording an asset or liability in the financial statements at the time it is incurred or acquired.

Measurement Basis

The method or approach used in accounting to determine the value at which assets, liabilities, income, and expenses are recorded in the financial statements.

Cost

The value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore.

Revaluation

An adjustment of the value of an asset to reflect its current market value rather than its cost value.