2. Assume that in the state of Kentucky, Bill is guaranteed S400 of welfare benefits if he does not work at all.They are allowed a disregard of $100 and face a tax rate of 50%. He has a nonlabor income equal to zeroand if the works he can carn a wage of $10 per hour. His total time is 200 hours a woek.a. How many hours of leisure is Bill consuming at his break even point?b. Graph the budget constraint, labeling the break even point and other breaks in the curve as well asslopes of each line. Draw Bill's indifference curves such that he chooses to work 5 hours a month.

The framework of neoclassical model of labor-leisure choice helps in analyzing the factors that…

2. Assume that in the state of Kentucky, Bill is guaranteed $400 of welfare benefits if he does not work at all. They are allowed a disregard of $100 and face a tax rate of 50%. He has a nonlabor income equal to zero and if the works he can earn a wage of $10 per hour. His total time is 200 hours a week. a. How many hours of leisure is Bill consuming at his break even point? b. Graph the budget constraint, labeling the break even point and other breaks in the curve as well as slopes of each line. Draw Bill's indifference curves such that he chooses to work 5 hours a month.

2. Assume that in the state of Kentucky, Bill is guaranteed $400 of welfare benefits if he does not work at all. They are allowed a disregard of $100 and face a tax rate of 50%. He has a nonlabor income equal to zero and if the works he can earn a wage of $10 per hour. His total time is 200 hours a week. a. How many hours of leisure is Bill consuming at his break even point? b. Graph the budget constraint, labeling the break even point and other breaks in the curve as well as slopes of each line. Draw Bill's indifference curves such that he chooses to work 5 hours a month.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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