Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 17.3, Problem 1QQ
To determine
Does people work more or less in the increasing wage sector.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Refer to the laborāleisure budget constraint shown to answer the questions. This curve shows trade-offs between income and leisure that must be made over the course of oneĀ day.
How much does this person earn perĀ hour?
Ā
$
Ā
Ā
At point A, how many hours of labor areĀ selected?
Ā
hourshours
At point A, how many hours of leisure areĀ selected?
Ā
hours
No written by hand solution and imageĀ
There have been suggestions that the "work ethic" in the U.S. has declined. The claim is that, as a result, people are choosing to work fewer hours (at a given wage rate and level of unearned income) than did individuals in the past. This can be indicated by changes in individuals' indifference curves. Show such a change in indifference curves on graph with the consumption good on the Y-axis and leisure on the X-axis. How does the slope of the indifference curve change at a given level of leisure? (It may be useful to draw a simple budget constraint to indicate the change in hours of work.)
Show such a change in indifference curves on graph with the consumption good on the Y-axis and leisure on the X-axis. How does the slope of the indifference curve change at a given level of leisure? (It may be useful to draw a simple budget constraint to indicate the change in hours of work.)
Following exercise is requested:(a) Draw a budget line knowing that: nominal income is $100/week, price of lamb meat (Pm) is $2/kilo and price of housing (Ph) is $20/week. It is also known that ALL INCOME is spent on both goods.b) Assume now that monetary income remains CONSTANT, but price of lamb meat DOUBLES to $4/kilo, while the price of housing DECREASES to $10/week. Draw new budget line.
Chapter 17 Solutions
Microeconomics
Ch. 17.3 - Prob. 1QQCh. 17.3 - Prob. 2QQCh. 17.3 - Prob. 3QQCh. 17.3 - Prob. 4QQCh. 17.A - Prob. 1ADQCh. 17.A - Prob. 2ADQCh. 17.A - Prob. 3ADQCh. 17.A - Prob. 4ADQCh. 17.A - Prob. 1ARQCh. 17.A - Prob. 2ARQ
Ch. 17.A - Prob. 3ARQCh. 17.A - Prob. 4ARQCh. 17.A - Prob. 1APCh. 17.A - Prob. 2APCh. 17 - Prob. 1DQCh. 17 - Prob. 2DQCh. 17 - Prob. 3DQCh. 17 - Prob. 4DQCh. 17 - Prob. 5DQCh. 17 - Prob. 6DQCh. 17 - Prob. 7DQCh. 17 - Prob. 8DQCh. 17 - Prob. 9DQCh. 17 - Prob. 10DQCh. 17 - Prob. 1RQCh. 17 - Prob. 2RQCh. 17 - Prob. 3RQCh. 17 - Prob. 4RQCh. 17 - Prob. 5RQCh. 17 - Prob. 6RQCh. 17 - Prob. 7RQCh. 17 - Prob. 1PCh. 17 - Prob. 2PCh. 17 - Prob. 3PCh. 17 - Prob. 4PCh. 17 - Prob. 5P
Knowledge Booster
Similar questions
- Dr. Farida is planning for her requirement. Suppose she can consume her salary of Rs. 100,000 while she is in service or save her salary to consume it after retirement. When she saves her salary she will get 10% interest on it. Draw Dr. Faridaās budget constraint, her indifference curve and her optimum. ?arrow_forwardGive typing answer with explanation and conclusionĀ Ā You have opened your own word-processing service. You bought a personal computer, and paid $5,000 for it. However, due to the cost changes in the computer industry, the current price of an equivalent machine is $2,500. You could sell any used machine for $1,000. If you were not word processing, you could earn $20,000 per year at an alternative job. Assume that the interest rate is 10%. You can also hire an assistant who can do everything that you can do for $20,000 per year (you would still continue to do word processing). One person using one computer can produce 11,000 typed pages per year, and the price per page for your service is $2. You are considering three options: (A) expand your business by hiring an assistant; (B) leave your business the way it is; (C) shut down. Ā Fill in the Blank Ā For Option B, economic profit is $_______.arrow_forwardQuestion 1 (a) What is the marginal rate of substitution and what is its importance in consumer theory? (b) Compare and contrast the marginal rate of substitution of perfect substitutes and perfect complements. Use diagrams and algebra to aid your exposition. (c) Briefly discuss the following: i. Lexicographic preferencesii. Homothetic preferencesarrow_forward
- Please no written by hand solutions K Suppose a farmer in Georgia begins to grow peaches. He uses $1,000,000 in savings to purchase land, he rents equipment for $80,000 a year, and he pays workers $150,000 in wages. In return, he produces 100,000 baskets of peaches per year, which sell for $3.00 each. Suppose the interest rate on savings is 2 percent and that the farmer could otherwise have earned $35,000 as a shoe salesman. What is the farmer's economic profit? The peach farmer earns economic profit of $ (Enter your response as an integer.)arrow_forwardIn economics, what is the law of diminishing marginal returns? A. The tendency of firms to minimize production costs B. The observation that as additional units of a variable input are added to fixed inputs, the additional output diminishes C. The relationship between inflation and unemployment D. The impact of government regulation on business operationsarrow_forward21) A grocery store employs fewer clerks after prices dropped for self-checkout machines used to collect customers money. In this example, labor and capital are considered a. complements. b. dependent. c. independent. d. substitutes. e. supplements.arrow_forward
- How can microeconomic theory(or theories) explain the existence of an increase in demand for luxury items among consumers? Precisely explain your answer in your own words. It has to be LESS THAN 400 WORDS.IMPORTANT NOTE: This question does not require a mathematical model for its answer.arrow_forward1Ā Ā Ā Dr. Abida is planning for her requirement. Suppose she can consume her salary of Rs. 200,000 while she is in service or save her salary to consume it after retirement. When she saves her salary, she will get 8% interest on it. Draw Dr. Abidaās budget constraint, her indifference curve and her optimum. 2Ā Ā If interest rate goes up to 15%, draw figures to show when she will save more and when she will save less.arrow_forwardLabor-Leisure choice.Ā Ā Uses 80 hour maximum work week.Ā Ā Ā Utility = R3C2Ā Ā Ā Ā Ā R = leisure C = dollar amount of income for consumption Budget Line 1: Wage = $16 per hour. No other income. Draw the Labor-Leisure diagram, including the budget line.Ā Ā Solve the point of optimization, and label it point A.Ā Ā Draw the indifference curve.Ā Ā Label it U1 Budget Line 2: Wage = $22 per hour. No other income. Draw the budget line for this new $22 wage. Solve the point of optimization, and label it point B.Ā Ā Draw the indifference curve.Ā Ā Label it U3 Use an auxiliary budget line to separate the income effect from the substitution effect. Identify the substitution effect as point S. Ā Ā Draw the indifference curve. Label it U2Ā Ā Ā Ā Ā Ā The point of optimization for part C can be labeled, rather than numerically solved, as long as the drawn answers show expected results for two normal goods.arrow_forward
- List and explain the four (4) properties of the indifference curves Describe the Giffen good and give an example. How do indifference curves represent the consumer's preferences? How do wages affect labor supply?arrow_forwardCOURSE: MICROECONOMICS - CONSUMER THEORY PD: exercise resubmitted. Image attachedarrow_forwardPlease no written by hand and no image As producers increase their output, generally the factors of production will become less productive and therefore more costly for each additional unit. This explains the law of diminishing marginal utility income effect substitution effect law of supply law of demandarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you