Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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- Solve itarrow_forwardEmberlynn has 80 hours per week that she can devote to time spent working or on leisure activities. Assume that Emberlynn is paid by the hour, and that her job will always allow her to work as many hours as she chooses. The following graph presents Emberlynn's weekly leisure-income tradeoff. The three lines labeled BC₁, BC₂, and BC show her time allocation budget at three different hourly wage levels. The given points A, B, and C represent her optimal time allocation choices along each of these constraints. INCOME (Dollars) 1200 800 400 0 BC₂ 8 BC, C 35 40 45 LEISURE (Hours) For each listed point, use the preceding graph to complete the following table by indicating the hourly wage as well as the number of hours per week Emberlynn will spend on labor and leisure. Wage Leisure Labor Point (Dollars per hour) (Hours) (Hours) A B Carrow_forwardPlease show the exact plotting points for the graph and please answer the table and last questionarrow_forward
- 4.1 Cindy gets utility from consumption (C) and leisure (L), and has a weekly timebudget ofT= 110 hours. Her utility function isU(C, L) = C L. She receives $660 each week from her great-grandmother regardless of how much Cindy works. What is Cindy's reservation wage? 4.2What is Cindy's optimal labor supply (h) and consumption (C) if her wage is 10 dollars per hour? Show your work.4.3arrow_forward4. Winona has 80 hours to divide between leisure and labor. Her utility function is u(r,c) = f(r) + c, when r represents hours of leisure, c represents dollars of consumption, and fis strictly concave. Winona's wage is wo = $15/hr. initially, then it rises to wi = $20/hr. (i) Explain what happens to Winona's labor supply when the wage rises, and why. (ii) Explain how the answer to (i) would change if Winona were to win a lottery.arrow_forwardThe lines on the graph are budget constraints, showing the tradeoff between labor and leisure. Suppose that when the wage changes, an individual chooses to move from point A to another point on the graph. For each of the other points, where would it belong on the backward bending labor supply curve? Backward‑bendingportionVerticalportionUpward‑slopingportion Answer Bank B D F C Earrow_forward
- 5. Suppose that John could work 365 days per year and could earn $200 per day for each day he worked. a. Draw his budget line with respect to his labor-leisure tradeoff b. Suppose that John chooses to work 200 days per year. Draw the appropriate indifference curve, and not his equilibrium wage income and labor-leisure choices c. Suppose that John’s wage rises to $210 per day. Show how his equilibrium level of income and labor-leisure will change. d. Suppose John is ill ten days per year. Draw the impact of this illness on the equilibrium above. How will it change his equilibrium allocation of earnings and labor vs. leisure?arrow_forward1. Given the graph below, would Amy enter the LF? What is her reservation wage? MG() A 33 30 15 16 Hours of NMT 2. Suppose Amy's nonlabor income increases and shifts her budget constraint to BE'. Given the graph below, what happened to Amy's reservation wage? How would Amy's work decision change? 0 MO(S) A 30 E 16 Hours of NMTarrow_forwardASAP pls Discuss the possible substitution effect and the income effect of an increase in income on leisure time..arrow_forward
- please answer in text form and in proper format answer with must explanation , calculation for each part and steps clearlyarrow_forwardCindy gains utility from consumption C and leisure L. The most leisure she can consume in any given week is 168 hours. Her utility function is U ( C, L) = C x L. This functional form implies that Cindy’s marginal rate of substitution is C/L. Cindy receives $630 each week from her great-grandmother—regardless of how much Cindy works. What is Cindy’s reservation wage?arrow_forwardAkua gains utility from consumption C and leisure L. The most leisure she can consume in any given week is 110 hours. Her utility function is U (C, L) = C × L. Akua receives 660 GHS each week from her great-grandmother—regardless of how much she works. a. What will be Akua’s marginal rate of substitution. b. What will be Akua’s reservation wage? (Explain in detail)arrow_forward
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