Question

A) Contrast optimal labor supply to both underemployment and overemployment.

B) Which of these (above) two sub-optimal states would you consider to be more detrimental to the household (not just individual) utility level, and why?

C) What might prompt some households to be substituting for “time-intensive” with “goods-intensive” production and consumption activities? Provide some concrete examples of both a household production and a consumption type of activity. To what extent does this relate back to the historical, underlying motivations of people to work (for pay)?

Answer 1