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

question 301

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 labour,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.

---

Definitions:

Machine-Hours

refers to the total number of hours that machinery is in operation during a specific period, used in calculating machine-related expenses or allocations.

Overhead Applied

The amount of manufacturing overhead costs allocated to individual products or job orders based on the predetermined overhead rate.

Predetermined Overhead Rate

An estimated overhead rate used to allocate manufacturing overhead to products or job orders, calculated before production begins based on budgeted costs and activities.

Finishing Department

The department in a manufacturing process where products undergo final operations, such as painting, polishing, or packaging, before being sold.