Question

When your wages rise, the: 1. opportunity cost of an hour of leisure increases. 2. opportunity cost of an hour of leisure stays the same. 3. opportunity cost of an hour of work decreases. 4. cost of working increases.

Answer 1

Answer: Option 2

Option 2 is correct because opportunity cost is the monetary loss arising from not taking the the another opportunity. In this case the another opportunity is not working for the company. By enjoying days on leave would cost one hour the same that I earn by working for the company.