Bruce works for a large bank His wage rate is 40 per hour He

Bruce works for a large bank. His wage rate is $40 per hour. He can work up to 50 hours each week. The table below shows her utility from different levels of leisure and income. If Bruce decides to increase his weekly hours of work from 20 to 30 hours, the marginal utility loss from having less leisure and more income is:

Hours of leisure

Total utility from leisure

Income

Total utility from income

0

0

0

0

10

29

300

40

20

54

400

72

30

73

600

96

40

86

800

108

50

92

900

116

1200

120

1500

122

1600

124

2000

125

a-13

b-21

c-27

d-7

Hours of leisure	Total utility from leisure	Income	Total utility from income
0	0	0	0
10	29	300	40
20	54	400	72
30	73	600	96
40	86	800	108
50	92	900	116
		1200	120
		1500	122
		1600	124
		2000	125

Solution

Answer is d 7 Explanation: Current situation (20 hours leisure and 30 hours worked) Total utility from 20 hrs of leisure 54 Total utility from 30 hous of work 120 ($ 1200 income) Total utility derived currently 174 Revised situation (30 hours leeisure) Total utility of 30 hours leisure 73 Total utility of 20 hours work (i.e. 800 income) 108 Total Utility derived 181 Difference 7