Suppose we represent time endowment (24 hours/day) by H, hours of paid work by L, wage rate per hour, by W, and leisure by ℓ, How to write an expression for the following ?
1) Wage income (W)
2)Hours devoted for leisure if the supply of labour services (working hours) is known for any given amount of time.
3 )What is the opportunity cost to an individual for devoting more time to leisure?
4) Explain how an individual can increase his/her wage income, if the hourly wage is fixed.
4) How can the time devoted to paid work be increased?
1) Wage income (W)
2)Hours devoted for leisure if the supply of labour services (working hours) is known for any given amount of time.
3 )What is the opportunity cost to an individual for devoting more time to leisure?
4) Explain how an individual can increase his/her wage income, if the hourly wage is fixed.
4) How can the time devoted to paid work be increased?
1 Answer
Income = W * H
Explanation:
This may be more of a basic economics question than an application of statistical measures. The only relative “statistic” here is the distribution of available hours between paid work and leisure.
Income is simply wages times time. More work time results in more income, up to the maximum daily allotment. Leisure hours as a function of the labour supply is not defined in this problem. If you mean equal distribution of work hours over the available work force for a given number of man-hours of work, then it is a ratio of the work force times the available hours, divided by the work demand.
The “opportunity cost” to an individual to not work is simply the amount of wages that could have been earned if the person was working. In real life, to be an opportunity cost, the option to work for wages must exist. The time devoted to paid work is the inverse of this. It can only be increased by decreasing the amount of leisure time.
