EBK INTERMEDIATE MICROECONOMICS AND ITS
12th Edition
ISBN: 9781305176386
Author: Snyder
Publisher: YUZU
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Question
Chapter 13, Problem 13.9P
a
To determine
To state: The budget constraint of Mrs. S.
b)
To determine
To calculate: The number of hours devoted on work and leisure to maximize utility.
c)
To determine
To construct:Graphical representation of budget constraints.
d)
To determine
To plot: Graphical representation of supply of labor curve.
e)
To determine
To plot: Graphical representation of both supply curve.
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Students have asked these similar questions
what is the budget line for consumption and
leisure if a person faces a constant wage of $5
per hour , there are 168 hours in the week to
work,and she received non-labor income of
200 per week
Sheila's income and leisure preferences can be
expressed by
U(Y, L) = 2 x (YL - 40Y - 100L)
This utility function implies that Sheila's marginal utility
of leisure is 2Y - 200 and her marginal utility of income
2L-80. In a week, there are 168 hours available for her
to allocate between work and leisure. Sheila earns $10
per hour after taxes and receives $120 worth of welfare
benefits each week during the pandemic regardless of
how many hours she decides to work. Assume that the
price index is 1.
a) What is Sheila's budget line?
b) What is Sheila's marginal rate of substitution when L
= 100 and she is on her budget line?
c) What is Sheila's optimal relationship between income
and labour hours?
d) What is Sheila's optimal amount of labour hours,
leisure hours, and income?
e) At the optimal allocation, what is Sheila's utility level?
Show your work.
Juan is currently working in a job that pays $25 an hour and he chooses to work 8 hours per day. Assume that Juan can work a maximum of 16 hours a day, and he has complete flexibility in how many hours a day he works.
Illustrate Juan’s budget constraint and his optimal choice of consumption and leisure. What is the slope of his budget constraint? What does this slope represent? (As on any graph you draw, make sure that you label the axes, the intercepts and the optimal choice.)
Juan begins receiving a government transfer payment of $100 per day. Add his new budget constraint to your graph in (a) and show his new optimal choice. Does he choose more or less consumption? More or less leisure? Explain why for both goods.
The government imposes a tax of 25% on Juan’s earnings from work and increases his government transfer to $150 per day (the government transfer payment is not taxed.) Redraw the budget constraint from part (b) (omit the part (a) budget constraint), and add a new budget…
Chapter 13 Solutions
EBK INTERMEDIATE MICROECONOMICS AND ITS
Ch. 13.1 - Prob. 1MQCh. 13.1 - Prob. 2MQCh. 13.2 - Prob. 1TTACh. 13.2 - Prob. 2TTACh. 13.3 - Prob. 1MQCh. 13.3 - Prob. 2MQCh. 13.5 - Prob. 1MQCh. 13.6 - Prob. 1MQCh. 13.6 - Prob. 1TTACh. 13.6 - Prob. 2TTA
Ch. 13.6 - Prob. 1.1TTACh. 13.6 - Prob. 2.1TTACh. 13 - Prob. 1RQCh. 13 - Prob. 2RQCh. 13 - Prob. 3RQCh. 13 - Prob. 4RQCh. 13 - Prob. 5RQCh. 13 - Prob. 6RQCh. 13 - Prob. 7RQCh. 13 - Prob. 8RQCh. 13 - Prob. 9RQCh. 13 - Prob. 10RQCh. 13 - Prob. 13.1PCh. 13 - Prob. 13.2PCh. 13 - Prob. 13.3PCh. 13 - Prob. 13.4PCh. 13 - Prob. 13.5PCh. 13 - Prob. 13.6PCh. 13 - Prob. 13.7PCh. 13 - Prob. 13.8PCh. 13 - Prob. 13.9PCh. 13 - Prob. 13.10P
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