Janet, a mother of two, decides to reduce her working hours to spend more time with her children.

Janet, a mother of two, decides to reduce her working hours to spend more time with her children. By itself, assuming everything else being the same, this development has necessarily resulted in a lower quality of life for Janet due to a fall in income (and resultant fall in economic activity as measured by GDP).

Expert Solution

False.

Reason: This situation represents a backward sloping supply curve of labour. According to this, beyond a certain maximum level of wages a person prefers more of leisure time (non-paid time) over working hours (paid time). Thus, reduction in working hours does not necessarily indicate a lower standard of living for a person because they prefer leisure over work only when they are already getting a good pay and as a resultant of it have a good quality of life.

Rahul Sunny answered 2 years ago

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