Q3. Suppose the market wage is w, Tom's parents give him N dollars per month, and Tom has T hours per month to distribute between leisure and working, assume leisure is a normal good. a) Please graph Tom's income constraint in a figure with the consumption on the vertical axis and leisure on the horizontal axis. Please clearly label all the intercepts and slope in the graph. b) Suppose the market wage increases from w to w1, please draw the new constraint curve in the same graph in a) c) i)Associated with the wage increase in b), there is an overall increase of working hours for Tom. what effects are associated Tom's increasing working hours, please interpret/explain each effect and its direction carefully. ii)Please show the affects you discussed from c) in the same graph of a) on horizonal axis and label clearly
Q3. Suppose the market wage is w, Tom's parents give him N dollars per month, and Tom has T hours per month to distribute between leisure and working, assume leisure is a normal good.
a) Please graph Tom's income constraint in a figure with the consumption on the vertical axis and leisure on the horizontal axis. Please clearly label all the intercepts and slope in the graph.
b) Suppose the market wage increases from w to w1, please draw the new constraint curve in the same graph in a)
c) i)Associated with the wage increase in b), there is an overall increase of working hours for Tom. what effects are associated Tom's increasing working hours, please interpret/explain each effect and its direction carefully.
ii)Please show the affects you discussed from c) in the same graph of a) on horizonal axis and label clearly.
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