Final answer:
The terms 'recreation' and 'leisure' relate to the time spent away from 'paid work.' Leisure is considered a good, contributing to happiness and well-being, and the labor-leisure choice outlines the trade-off between work and leisure time.
Step-by-step explanation:
The terms recreation and leisure are defined by how they differ from paid work. In essence, leisure time is the time that is not spent working. People obtain utility, or satisfaction, from engaging in leisure activities, which can include a wide range of pursuits such as reading, watching television, or engaging in sports. Leisure is considered a good, similar to tangible products, as it contributes to personal happiness and well-being. The decision on how much leisure time to enjoy involves a trade-off with paid work, since not working reduces the ability to purchase consumption goods. The labor-leisure choices are made along a budget constraint, which illustrates the trade-offs between hours worked and leisure time as wages vary. This dynamic forms the basis of the labor supply curve in economics.