How does an increase in the hourly wage rate affect the opportunity cost of taking leisure time?

Show Answers

It stays the same regardless of wage changes.It rises because the cost of missing one hour of work becomes higher.It declines since the individual has more money to use.It can either rise or fall based on personal preferences.It becomes irrelevant as income increases.

Explanation

The opportunity cost of leisure grows when the hourly wage increases because each hour spent not working means forgoing a higher amount of earnings.