As some people's per hour wages go up, they may actually choose to work less and leisure more

Economics Dec 18, 2020

As some people's per hour wages go up, they may actually choose to work less and leisure more. Explain whether this is rational economic behavior.

Expert Solution

An economically rational individual will work only if the marginal benefit of work exceeds the marginal benefit of leisure. Likewise, individuals have a disutility for working. As a person works more the marginal cost of another hour of work may increase (e.g. the worker gets tired or bored). So, if an individual realizes a large income because her wage increases, that individual may decide that the marginal benefit of adding leisure may exceed the marginal benefit of another hour of work.

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