Comment critically: “Stock market gains reduce an individual’s number of hours worked in a given time...

Comment critically: “Stock market gains reduce an individual’s number of hours worked in a given time period.”

Solutions

Expert Solution

The gains are the profits and profits lure humans to work more so as to earn more. But the case of stock market is quite different from the other markets.

Stock market basically deals with selling and buying of shares/equities of listed companies. It aimed at securing the interest of investors by avoiding any types of frauds. This market was established to save the interest of both investors as well as the companies. Companies are at par because higher ranking in the stock market helps in gaining Goodwill;which would be used for increasing capital investments further.

The investor if gains, at his investment, would be preferring to work less as there might be scope of increased expected gains. This increased expected gains may shift the interest of investors from working more to utilising leisure time. This would be similar to the application of indifference curve approach,where individual prefers leisure over work at higher wage rate;this is so because higher income increases their utility and they would move to higher indifdindiff curve.

Rahul Sunny answered 1 year ago

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