Assume you have been laid off from your job and withdrew from the labor market. You have zero non-labor income. If you did supply labor to the market, you could earn $7.25 per hour. There are 110 non-sleeping hours available during a week. a. Draw the budget constraint and indifference curve that depicts the situation described above. b. Because you were laid-off from your job, you qualify for unemployment insurance (UI). In Wisconsin, you could earn $370 per week without working. If you do choose to work, your labor earnings are taxed at 67%. Furthermore, under state law, you could work up to 31 hours during the week and still receive UI. Show how this UI program alters your budget constraint. c. Would the UI program described in part (b) alter your decision to supply labor to the market? Why or why not?

Assume you have been laid off from your job and withdrew from the labor market. You have zero non-labor income. If you did supply labor to the market, you could earn $7.25 per hour. There are 110 non-sleeping hours available during a week. a. Draw the budget constraint and indifference curve that depicts the situation described above. b. Because you were laid-off from your job, you qualify for unemployment insurance (UI). In Wisconsin, you could earn $370 per week without working. If you do choose to work, your labor earnings are taxed at 67%. Furthermore, under state law, you could work up to 31 hours during the week and still receive UI. Show how this UI program alters your budget constraint. c. Would the UI program described in part (b) alter your decision to supply labor to the market? Why or why not?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter12: Income Distribution, Poverty, And Discrimination

Section: Chapter Questions

Problem 20SQ

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A worker has no non-labor income and is earning $14/hour. He maximizes utility by working 40 hours per week. Begin by drawing a graph that illustrates this to be the utility-maximizing solution. The same worker loses his job. He is entitled to unemployment compensation that will pay up to 50% of his weekly earnings. The worker has an opportunity to supplement his unemployment compensation by taking a job that pays $7/hour. Using the same graph, show the worker's new budget line and his utility-maximizing decision as whether to work the new job and how many hours to work. Make sure your graph shows the relevant budget lines and indifference curves.
Consider an income guarantee program with an income guarantee of $5,000 and a benefit reduction rate of 40%. A person can work up to 2,000 hours per year at $10 per hour. a. Draw the person’s budget constraint with the income guarantee. b. Suppose that the income guarantee rises to $7,500 but with a 60% reduction rate. Draw the new budget constraint c. Which of these two income guarantee programs is more likely to discourage work? Explain. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Optimal unemployment insurance: Consider the following two proposals toreform unemployment insurance. Explain the arguments for and against eachreform.(a) Te insurance payment would be increased so that it replaced 100% of aworker’s regular labor income for 26 weeks.(b) Each worker would be paid a lump sum equal to 10 weeks of his or herlabor income at the start of the spell of unemployment. Tere would thenbe no other payments.
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people may chose to ofer less work at higher wages because the utility of lesier increases because of the income generated by higher wages. leading the workernto chose lesier over work true false
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Joanne states: "The best way to increase the wages of workers is to increase workerproductivity." Is Joanne correct? Why or why not?