Suppose that John could work 365 days per year and could earn $200 per day for each day he worked. Draw his budget lines with respect to his labor-leisure choice.
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Suppose that John could work 365 days per year and could earn $200 per day for each day he worked. Draw his budget lines with respect to his labor-leisure choice.
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- draw a budget line for a person who works 2000 hours a year today at 16$ per hour and expects to work 2000 hours in the future at the same wage. then show the effect on the graph if he increases his hourly wage to 50$an hourExplain the fact that typical person employed in production worked 55 hours per week in 1900, 40 hours in 1940 and 34 hours in 2010. Use income and substitution effects in your explanations?Refer to the labor–leisure budget constraint shown to answer the questions. This curve shows trade-offs between income and leisure that must be made over the course of one day. How much does this person earn per hour? $ At point A, how many hours of labor are selected? hourshours At point A, how many hours of leisure are selected? hours
- Tom earns $15 per hour for up to 40 hours of work each week and $30 per hour for every hour in excess of 40. Tom also faces a 20 percent tax rate, pays $4 per hour in child care expenses for each hour he works, and receives $80 in child support payments each week. There are 110 (non-sleeping) hours in the week. Graph Tom’s weekly budget line. Under what conditions would Tom choose to work 40 hours a week?Suppose that the cost of living increases, thereby reducing the purchasing power of your income. If your money wage doesn’t increase, you may work more hours because of this cost-of-living increase. Is this response predominantly an income effect or a substitution effect? Explain.Illustrate (using a labor-leisure choice diagram) how a firm may induce a typical employee to lengthen his work week voluntarily by paying him premium wage rates for overtime hours.
- The marginal rate of technical substitution shows a)how many machines can be replaced by computers, keeping output constant. b)the rate at which technology advances change marginal productivity. c)how many workers can do the job of one computer, keeping output constant. d)how many computers are needed to replace workers so that output can increase.Suppose that the cost of living increases, thereby reducing the purchasing power of your income. If your money wage doesn’t increase, you may work more hours because of this cost-of-living increase. Is this response predominantly an income effect or a substitution effect? Explain. with simple example(Substitution and Income Effects) Suppose that the cost of living increases, thereby reducing the purchasing power of your income. If your money wage doesn’t increase, you may work more hours because of this cost-of-living increase. Is this response predominantly an income effect or a substitution effect? Explain.
- Explain in detail Discuss the possible substitution effect and the income effect of an increase in income on leisure time.Suppose the wage you are being paid per hour doubles form $15 to $30. Would you decide to work more hours or fewer hours ? Is there an income and substitution effect involved in your decision about how many hours you choose to work? If so, what is being substituted for what?Suppose that Boston consumers pay twice as much hours as she wants at a wage of w, chooses to work 10 hours a day. Her Boss decides to limit the number of hours that she can work to 8 hours per day. Show how her budget constraints and choice of hours change. Is she unambiguously worse off as a result of this change? Why?
