Use the grophical model of individual Jabours supplyChoice (indiffrence curves and budget lines in aleisure-vs-income system of coordinates).a). Draw a diagram and show what happens to theequilibrium choice of work hours by a worker whenthe worker's uncle sets a trust fund that sendsunconditional weekly payments of $1000 to the worker.1 Explain, in words, why you have concluded thathavepayments starts arriving if you're your diagram showsweeklythat they would choose to work less (or why youconcluded that an individual would choose to workmore hours after the weekly payments startsarriving if you're your diagram shows thatthey would choose to work more).

Indifference curves, in an income vs. leisure system, represent the utility derived from the…

unconditional Use the graphical model of individual labours supply Choice (indiffrence leisure-vs-income system of cooridinates). Curves and budget lines in a a). Draw a diagram and show what happens to the equilibrium choice of work hours by a worker when the worker's uncle sets a trust fund that sends 1 Explain, in words, why you have concluded that weekly payments of $1000 to the worker an individual would choose to work less after the weekly payments starts arriving if you're your diagram shows that they would choose to work less ( on why you have concluded that an individual would choose to work more hours after the weekly payments starts arriving if you're your diagram shows that they would choose to work more).

unconditional Use the graphical model of individual labours supply Choice (indiffrence leisure-vs-income system of cooridinates). Curves and budget lines in a a). Draw a diagram and show what happens to the equilibrium choice of work hours by a worker when the worker's uncle sets a trust fund that sends 1 Explain, in words, why you have concluded that weekly payments of $1000 to the worker an individual would choose to work less after the weekly payments starts arriving if you're your diagram shows that they would choose to work less ( on why you have concluded that an individual would choose to work more hours after the weekly payments starts arriving if you're your diagram shows that they would choose to work more).

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter15: Poverty And Economic Inequality

Section: Chapter Questions

Problem 3SCQ: Imagine that the government reworks the welfare policy that was affecting Jonathan in question 1, so...

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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.
Need Step by Step answer: How to draft on Excel. Because Income depends on work effort and work effort depends on nutrition, suppose the relationship between income (Y) and total food availability (F) in a poor household is given by: Y = 10F + 20F2 – 0.6F3 a) If food availability in a two-person household is 20, would it be “rational” to share the food? Explain. b) If food availability in a two-person household is 30, would it be “rational” to share the food? Explain.
Assume you have been laid off from your job and withdrew from the labor market. Youhave zero non-labor income. If you did supply labor to the market, you could earn $7.25per hour. There are 110 non-sleeping hours available during a week.a. Draw the budget constraint and indifference curve that depicts the situationdescribed above.b. Because you were laid-off from your job, you qualify for unemploymentinsurance (UI). In Wisconsin, you could earn $370 per week without working. Ifyou do choose to work, your labor earnings are taxed at 67%. Furthermore, understate 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 tothe market? Why or why not?
Marley has 100 hours per week available she can spend either working or doing leisure activities. He can work at a wage rate of $50 per hour. Bob receives $1000 of rental income per week, no matter how much he works. Use leisure-income model to solve this:- i) draw Marley budget line and optimal choice of working 80 hours in a week then calculate the maximum and optimal amount of income ii.) And suppose Marley is suppose to share the household expenses and then be taxed 50% of her wage income. then draw another diagram to compare Marley choice in Part i) and the new labour supply decision of working 90 hours per week due to the tax. Clearly label out the income effect, substitution effect and total effect in the diagram.
What are the ‘Lessons’ of the Specific Factor Model? Demonstrate this lesson using formal modeling (either graphs or equations).
Follow-up questions d. In this model, workers earn the same total assets whether they work L1 or L2 hours. Is the worker better offff at L1 or L2 hours of work? e. If disutility from work were included in the model, would this shrink, expand, or keep the same the size of the region where workers have no incentive to work? f. In your own version of Figure 18.7, draw three sets of plausible utility curves that take assets as a positive input and hours worked as a negative input. Draw one set so that the worker elects to work less than L1 hours, one set so that the worker elects to work exactly L1 hours, and one set so that the worker elects to work more than L2 hours. g. Explain why the utility curves cannot be drawn so as to induce the worker to work between L1 and L2 hours. h Yelowitz (1995) studies a Medicaid reform measure that reduced the Medicaid work disincentive. One of the reforms he studied raised the Medicaid eligibility threshold income level by 33%. Draw a new version of the…
Consider a worker who earns $20/hour in the labor market and receives $50 per week innon-labor income. Assume the total number of hours available for work (h) and leisure(L) is 168 hours per week (i.e., ? = 168 = ℎ + ?). a. Draw the budget constraint for this individual. Label the endowment point. b. What is the maximum value of consumption that this individual could achieve ina week? c. In the United States, the Fair Labor Standards Act requires workers to be paid 1.5times their usual hourly wage for “overtime” work, defined as work in excess of40 hours in a week. If this law applies to the worker described above, how does itchange the budget constraint? d. Now suppose Congress passes an income tax. The income tax applies to labor andnon-labor income. The Fair Labor Standard Act is still in effect. The first $1,000in weekly income is exempt from the tax. However, every dollar above $1,000 istaxed at a rate of 10%. (To be clear: the tax on $1,000 in income is 0, the tax on$1,001 is…
A utilitarian believes that the redistribution ofincome from the rich to the poor is worthwhile aslong asa. the worst-off members of society benefit from it.b. those contributing to the system are in favor of it.c. each person’s income, after taxes and transfers,reflects his marginal product.d. the distortionary effect on work incentives is nottoo large.
One proposal includes increasing the EITC for childless workers to provide additional assistance for many poor workers. While an increase in the EITC would increase resources to qualifying childless workers, what impact will it have on their working decision? Assume a basic hours towards leisure and income towards consumption model. a. If qualifying childless workers already have a strong preference to work so they are already choosing to work (ex: 10 hours), an increase in the EITC could lead to a new choice involving fewer hours spent working, more hours spent towards leisure and more income towards consumption. Thus, the EITC expansion could discourage work. b.If qualifying childless workers already have a strong preference to not work so they are already choosing to work very littleand mostly enjoy leisure, an increase in the EITC could lead to a new choice involving more hours spent working, fewer hours spent towards leisure and more income towards consumption. Thus, the…
Kevin has a wage income of $10,000 in the present and $15,000 in the future. His utility is given as U = min (4cp, 5cf), where cp denotes consumption today and cf consumption in the future. The relevant interest rate is 10%. a. If the interest rate were to increase to 15 percent,would Kevin be better off or worse off? Explain. b. Find two measures to indicate how much better off or worse off Kevin is as a result of the increase in interest rates. Explain.
Name two products for which each of the threefollowing demographic variables would be mostinfluential in determining consumption. If youcould combine two of the three, which would bethe second demographic you would add to each?Justify your answer.a. Incomeb. Educationc. Occupation
A worker receives a wage rate w and has L hours of leisure every day (the total endowment of hours is 24 hours per day). The government gives a subsidy of rate S of his income. The worker spends all his income. 1. Write a budget constraint of this individual and plot it. 2. Display graphically what is the optimal consumption-leisure choice for this worker. 3. Imagine that instead, the government imposes income tax at rate T . What is the new budget constraint? Display on the same picture. In the new optimum is the consumption higher? Explain the answer in terms of wealth and substitution effects.