![]() ![]() Not only that, your prospective employer lets you choose how many hours you work each week. Suppose, by some happy stroke of luck, you are offered a job at a much higher wage-six times higher. There are 168 hours in a week, so after 40 hours of work, you are left with 128 hours of free time for all your non-work activities, including leisure and sleep. Imagine that you are working in New York, in a job that is paying you $15 an hour for a 40-hour working week, which gives you earnings of $600 per week. This model also helps to explain differences in the hours that people work in different countries, and the changes in our hours of work throughout history.A model of decision making under scarcity can be applied to the question of how much time to spend working, when facing a trade-off between more free time and more income.Opportunity costs describe the unavoidable trade-offs in the presence of scarcity: satisfying one objective more means satisfying other objectives less.Economists model these situations, first by defining all of the feasible actions, then evaluating which of these actions is best, given the objectives.Decision making under scarcity is a common problem because we usually have limited means available to meet our objectives.How individuals do the best they can, and how they resolve the trade-off between earnings and free time
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