Recall that leisure time in our model of the representative consumer is intended to capture any time spent not working in the market, including production at home, such as yard work and caring for children. Suppose that the government were to provide free day care for children and, for the purpose of analyzing the effects of this, assume that this has no effect on the market real wage w, taxes T, and dividend income . Assume that initially the representative consumer uses some but not all available time for leisure, and assume that the consumer is indifferent between time leisure time spent caring for children and leisure time spent in other ways. Determine the effects of the daycare program on consumption, leisure (including government-provided daycare services), and hours worked for the consumer. A Click the icon to view information about the initial model used here. In this case, the substitution effect V in consumption and in leisure, and the income effect V in consumption and in leisure. Overall for the representative consumer, there in consumption, there V in leisure, and there in hours worked. may be an increase, a decrease, or no change will be no change will be an increase will be a decrease

Recall that leisure time in our model of the representative consumer is intended to capture any time spent not working in the market, including production at home, such as yard work and caring for children. Suppose that the government were to provide free day care for children and, for the purpose of analyzing the effects of this, assume that this has no effect on the market real wage w, taxes T, and dividend income . Assume that initially the representative consumer uses some but not all available time for leisure, and assume that the consumer is indifferent between time leisure time spent caring for children and leisure time spent in other ways. Determine the effects of the daycare program on consumption, leisure (including government-provided daycare services), and hours worked for the consumer. A Click the icon to view information about the initial model used here. In this case, the substitution effect V in consumption and in leisure, and the income effect V in consumption and in leisure. Overall for the representative consumer, there in consumption, there V in leisure, and there in hours worked. may be an increase, a decrease, or no change will be no change will be an increase will be a decrease

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.12P

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