7. Consider a generic consumption/leisure choice. How will the follow ing events/policies affect either the consumer's choice of hours worked and labor supply, if at all? Be specific as possible about income and substitution effects and if there are multiple cases, consider them all (a) A raise in the wage rate (b) A labor income tax on all income. (c) A labor income tax on all labor income beyond the first 20 hours.

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A: 1) Reduction in salary = 40% x $60,000 = $24,000 After the 40% fall in the salary, an average…

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A: Given: Time=0-52 weeks Wage per week=$1000

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A: Given assumptions  that; A person earns $10 per hour and her non-labor income increases from $100 to…

Q: 2. Originally, the price of X is $20 and the price of Y is $80. If the price of X decreases by $5…

A: Budget Line: given the price of 2 goods and consumer’s income. The budget line shows different…

Q: 3) Diminishing marginal rate of substitution can be seen when indifference curves A) become flatter…

A: Typically, marginal substitution is lessening, meaning a shopper picks the substitute instead of…

Q: (a) (b) (c) 'Write down Tom's budget constraint. Write down Tom's optimal consumption-leisure…

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Q: 8. Suppose both the consumption good and leisure are normal goods any graphs what will happen to the…

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Q: 2. Separate the substitution effect from the income effect for an increase in the price of a Giffen…

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Q: 3. Discuss the income and substitution effect in the case of an individual's labor supply decision.…

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Q: Which the following statement is correct for a typical worker? a) Both the income and substitution…

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Q: 6. Explain the marginal rate of substitution. No more than 3 lines

A: Consumer behavior is the concept in which customers’ selection or buying behavior is identified for…

Q: Help!

A: Explanation is given below Explanation:

Q: Now, suppose that Amy is laid off, but she is eligible to collect unemployment benefits of $200 per…

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