Lance lives in Williston, North Dakota. The firms in town, such as the Walmart, pay teenagers without a high school degree the federal minimum wage of $7.25 an hour. Because his parents provide him Y (mostly in the form of room and board), Lance chooses to stay in school and not work. However, a new fracking firm starts production nearby so the wage rises to three times the minimum wage. Use a labor-leisure choice figure to show why he does not work initially but then works a substantial number of hours at the higher wage. Draw Lance's original budget constraint and show that he does not choose to work. The firms in town, such as the Walmart, pay teenagers without a high school degree the federal minimum wage of $7.25 an hour. Assuming the price of consumption is $1.00, what is the slope of Lance's original budget constraint? The slope of Lance's original budget constraint is - (Round your response to two decimal places.)

The utility of Amanda for leisure (L) and income (Y) is U = LY. The price of income is 1. If Amanda uses her spare L hours a day, (24 - L) hours will be labored. Since wages are w, the daily income is (24 - L). If the wages are positive, show that the optimal number of leisure hours that Amanda will use will always be the same. How much leisure time does Amanda demand and how much work time do she want to provide?

Q34 Justin Trudeau, who owns a barbershop in Ottawa, charges $8 per haircut. By hiring one barber named  Sophie at $11 per hour, the shop can provide 22 haircuts per eight-hour day. By hiring a second barber, Gregoire, at the same wage rate, the shop can now provide a total of 42 haircuts per day. The MP of Gregoire, the second barber is Multiple Choice   42 haircuts.   20 haircuts.   $242.   is negative.   $176.

Jones, without a job or job prospects, has been on social assistance for the past four months. Social assistance pays a basic benefit of $600 a month with a benefit reduction rate of 75 percent for earned income. Her welfare benefit is given as B = 600 - 0.75E, where E represents monthly earnings. Jones has just been offered a part-time job working 5 hours a day, 5 days a week, earning an hourly wage of $11. Sketch a budget constraint for Jones given the social assistance scheme in place and the wage rate available for part time work. How much income would she earn if she accepted the job? Would Jones still be on social assistance if she took the job? Draw the budget constraint.

Assuming we have a choice where we work and how many hours we want to work, what determines the number of hours we will work? Marginal changes in our opportunity cost (utility) of leisure as income increases (the substitution effect) Marginal changes in the utility of our income as total income changes (the income effect) It is based on how much money we need to meet our basic needs A combination of A and B

According to the Economics Policy Institute (Mishel and Wolfe, 2019) CEO pay has grown 940% since 1978 while the compensation of the average worker has only risen 12%. While you can easily find sources that provide statistics that conflict with these numbers, you would be hard pressed to find any credible source that refutes the idea that the rate of pay of CEO’s and other upper-level managers has not dramatically increased relative to an organization’s lower-level employees in just about any 10 or more year period over the past 60 years. In the world of Adam Smith, the “invisible hand” of the free market capitalistic model would address inequities/out of balances. Are the forces represented by the “invisible hand” working? Why or why not? Is there an ethical dimension to the discussion of upper-level manager compensation? Why or why not? How does (or does it?) levels of pay of upper management impact the rest of us commoners?

3.

Mark can work up to 80 hours each week at a pre-tax hourly wage of $20 but faces a constant 20 percent tax on his earnings. Thus, Mark maximizes his utility by choosing to work 50 hours per week. The government proposes a negative income tax whereby everyone is given $300 per week and anyone can supplement their income further by working. To pay for the negative income tax, tax on earnings will be increased to 50 percent. On a single graph, draw Mark's original budget line and his budget line under the negative income tax. Show that Mark will work fewer hours if the negative income tax is implemented Will Mark's utility be greater under the negative income tax? Discuss your answer.