Suppose Earnings Are Given by E = $50 + $20(24

question 136

Multiple Choice

Suppose earnings are given by E = $50 + $20(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) $30
• B) $26
• C) $24
• D) $20

---

Definitions:

Accrued Expense

Expenses that are recognized on the books before they have been paid, reflecting costs incurred during a particular period.

Adjusting Entry

An accounting record made to allocate income and expenditures to the appropriate accounting periods.

Interest Payable

Accrued interest that a company owes to its creditors or on its debts but has not yet paid.

Interest Expense

The cost incurred by an entity for borrowed funds over a period of time.