I'm not sure it does make that assumption - if you could arbitrarily exchange hours for money, then you could calculate out how man fewer hours to work and do t

I'm not sure it does make that assumption - if you could arbitrarily exchange hours for money, then you could calculate out how man fewer hours to work and do that, but otherwise you just have a benefit function with discontinuities in it (e.g. you lose your job if you try to work 35 hours per week, incurring large job switching costs), but I'm fairly certain you can still work out in the abstract which side of the discontinuity you're better off on.