Graph of TB & TC from Hours Working: The graph below measures the benefits and costs from working, from the perspective of a worker. The variable Q stands for the number of hours the worker works, such that the horizontal axis measures the hours of work per week. On the assumption that they can choose their hours, the worker estimates a total benefit ( TB) from working according to the equation, TB = 1.335Q. (The value "1.335" might be interpreted as the hourly wage paid to the worker.) The worker estimates their total cost from working with the equation, TC = Q(0.463)+Q°(0.027). (The TC of each Q might be interpreted as including the displeasure of effort and exertion from working Q hours.) It can be assumed that TC > TB for all hours beyond point B (32.3).

Graph of TB & TC from Hours Working: The graph below measures the benefits and costs from working, from the perspective of a worker. The variable Q stands for the number of hours the worker works, such that the horizontal axis measures the hours of work per week. On the assumption that they can choose their hours, the worker estimates a total benefit ( TB) from working according to the equation, TB = 1.335Q. (The value "1.335" might be interpreted as the hourly wage paid to the worker.) The worker estimates their total cost from working with the equation, TC = Q(0.463)+Q°(0.027). (The TC of each Q might be interpreted as including the displeasure of effort and exertion from working Q hours.) It can be assumed that TC > TB for all hours beyond point B (32.3).

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.8P

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