In any given week, Anne receives satisfaction only from the consumption of goods and from the consumption of leisure L, which is measured in hours. Obviously, Anne consumes many different types of goods, but for simplicity we aggregate the dollar value of all the goods that she consumes during the week and call it C. Assume that if Anne chooses to work, the hourly wage rate is w=8 and she has to sleep 8 hours per day. (Sleeping time is not considered leisure.) Potentially, if she wants, she can work up to 7 days a week. If Anne chooses to devote 0 hours to leisure during the week, how much can she consume? C = If Anne chooses to devote all available hours (except those she has to sleep) to leisure during the week, how much can she consume? C = If Anne chooses to devote 27 hours to leisure during the week, how much can she consume? C = Suppose w = 5 and the government gives Anne a subsidy of $300. She receives this money unconditionally, regardless of how many hours she works. We define Anne's budget set over bundles of C and L, i.e. (C,L). Placing C on the horizontal axis and L on the vertical axis, depict Anne's budget set. The outer boundary of Anne's budget set has a kink at (C,L)=(300, (fill in the blank) Suppose w = 5 and the government gives Anne a subsidy such that her consumption is at least $300. That is, if she does not work at all, the government gives her $300. If she works enough to earn some d dollars towards consumption, the government gives her $300-d. If she works enough to earn d≥ 300, the government does not give her anything. We define Anne's budget set. over bundles of C and L, i.e. (C,L). Placing C on the horizontal axis and L on the vertical axis, depict Anne's budget set. The outer boundary of Anne's budget set has two kinks. One kink - the one with the higher L of the two - is at (C,L)=(300) (fill in the blank) ... while the other kink - the one with the lower L of the two is at is at (C,L)=(300,) (fill in the blank).....
In any given week, Anne receives satisfaction only from the consumption of goods and from the consumption of leisure L, which is measured in hours. Obviously, Anne consumes many different types of goods, but for simplicity we aggregate the dollar value of all the goods that she consumes during the week and call it C. Assume that if Anne chooses to work, the hourly wage rate is w=8 and she has to sleep 8 hours per day. (Sleeping time is not considered leisure.) Potentially, if she wants, she can work up to 7 days a week. If Anne chooses to devote 0 hours to leisure during the week, how much can she consume? C = If Anne chooses to devote all available hours (except those she has to sleep) to leisure during the week, how much can she consume? C = If Anne chooses to devote 27 hours to leisure during the week, how much can she consume? C = Suppose w = 5 and the government gives Anne a subsidy of $300. She receives this money unconditionally, regardless of how many hours she works. We define Anne's budget set over bundles of C and L, i.e. (C,L). Placing C on the horizontal axis and L on the vertical axis, depict Anne's budget set. The outer boundary of Anne's budget set has a kink at (C,L)=(300, (fill in the blank) Suppose w = 5 and the government gives Anne a subsidy such that her consumption is at least $300. That is, if she does not work at all, the government gives her $300. If she works enough to earn some d dollars towards consumption, the government gives her $300-d. If she works enough to earn d≥ 300, the government does not give her anything. We define Anne's budget set. over bundles of C and L, i.e. (C,L). Placing C on the horizontal axis and L on the vertical axis, depict Anne's budget set. The outer boundary of Anne's budget set has two kinks. One kink - the one with the higher L of the two - is at (C,L)=(300) (fill in the blank) ... while the other kink - the one with the lower L of the two is at is at (C,L)=(300,) (fill in the blank).....
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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A6
Transcribed Image Text:In any given week, Anne receives satisfaction only from the consumption of goods and from the consumption of leisure L, which is measured in hours. Obviously, Anne consumes many
different types of goods, but for simplicity we aggregate the dollar value of all the goods that she consumes during the week and call it C. Assume that if Anne chooses to work, the hourly
wage rate is w = 8 and she has to sleep 8 hours per day. (Sleeping time is not considered leisure.) Potentially, if she wants, she can work up to 7 days a week.
If Anne chooses to devote 0 hours to leisure during the week, how much can she consume? C =
If Anne chooses to devote all available hours (except those she has to sleep) to leisure during the week, how much can she consume? C =
If Anne chooses to devote 27 hours to leisure during the week, how much can she consume? C =
Suppose w = 5 and the government gives Anne a subsidy of $300. She receives this money unconditionally, regardless of how many hours she works. We define Anne's budget set over
bundles of C and L, i.e. (C,L). Placing C on the horizontal axis and L on the vertical axis, depict Anne's budget set. The outer boundary of Anne's budget set has a kink at (C,L)=(300, (fill in the
blank)
Suppose w = 5 and the government gives Anne a subsidy such that her consumption is at least $300. That is, if she does not work at all, the government gives her $300. If she works enough to
earn some d dollars towards consumption, the government gives her $300 - d. If she works enough to earn d > 300, the government does not give her anything. We define Anne's budget set
over bundles of C and L, i.e. (C,L). Placing C on the horizontal axis and L on the vertical axis, depict Anne's budget set. The outer boundary of Anne's budget set has two kinks. One kink - the one
with the higher L of the two - is at (C,L)=(300) (fill in the blank)
... while the other kink - the one with the lower L of the two is at is at (C,L)=(300,) (fill in the blank)....
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