Why Preferences for Work and Consumption Remained Strong Despite Rising Prosperity

An influential economist in the 1930s predicted that as societies became significantly wealthier, people would choose to work far fewer hours. This prediction relies on a specific assumption about how individuals react to higher wages. Which statement best analyzes the two competing pressures a wage increase creates on an individual's choice between work and leisure, and correctly identifies the assumption behind the prediction?

An influential 1930s prediction argued that rising societal wealth would lead to a drastically shorter workweek. The core economic reasoning for this is that as wages increase, the opportunity cost of not working decreases, making people more willing to choose leisure over additional income.

Applying a Theory of Work and Leisure

Deconstructing a Prediction on Future Work Hours

Analyzing the Economic Logic of a Historical Work-Hour Prediction

An economic theory from the early 20th century predicted that rising prosperity would lead to a dramatic reduction in work hours. Match each component of this theory's logic to its corresponding description.

Suppose that in a particular country, average real wages have doubled over the past 50 years, while the average number of hours worked per week has decreased by 20%. Based on the economic model of individual choice between labor and leisure, which statement best explains this outcome?

Policy Analysis: Universal Basic Income and Work Incentives

A prominent 1930s economic forecast predicted that rising productivity and wages would lead to a workweek of 15 hours or less within a century, as people would easily satisfy their material needs and choose more leisure. In reality, while average work hours have decreased, they have stabilized well above this 15-hour mark in most prosperous nations. Based on the economic model of labor-leisure choice, which statement provides the best evaluation of this discrepancy?

A 1930s prediction that rising prosperity would lead to a 15-hour workweek was based on the logic that as wages rise, the opportunity cost of leisure also rises, making people value their free time more and thus choose to work less.