a. If she works 10 hours, how much are her earnings, how much is her welfare benefit, and how much is her income? b. After Elizabeth works a certain number of hours, she does not receive any benefit at all. What is that number of hours? c. Use your answer to parts a and b to plot her budget constraint. d. Sketch a set of indifference curves consis- tent with Elizabeth's participating in the labor market.

a. If she works 10 hours, how much are her earnings, how much is her welfare benefit, and how much is her income? b. After Elizabeth works a certain number of hours, she does not receive any benefit at all. What is that number of hours? c. Use your answer to parts a and b to plot her budget constraint. d. Sketch a set of indifference curves consis- tent with Elizabeth's participating in the labor market.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Use the following table showing the marginal utility schedules for product X and product Y for an…

A: Marginal Utility (MU) refers to the additional satisfaction enjoyed by consumer from consuming an…

Q: Leandro has 16 hours per day that he can allocate to work or leisure. His job pays a wage rate of…

A: The equation of the budget line : C=320-20L The slope of the budget line is -20 or -wage rate. To…

Q: The ECON 103 professors have two hundred midterm exams to grade. They offer to hire you to help them…

A: The income effect is the change in the consumption of products by consumers based on income and…

Q: A. Illustrate the worker's opportunity set in a given 24-hour period. B. Suppose the worker is…

A: The opportunity set is the boundary of all possible combinations of consumption that someone can…

Q: 11) An increase in the wage rate means that the opportunity cost of leisure has fallen.

A: Opportunity cost:It refers to sacrificing one good for an additional unit of another good. In…

Q: The local swimming pool charges nonmembers $10 per visit. If you join the pool, you can swim for $5…

A: The objective of the question is to find the annual fee that would make it just worthwhile for you…

Q: market and receives $50 per week in non-labor income. Assume the total number of hours available for…

A: Budget constraint shows different combination of two goods (consumption and leisure)that consumer…

Q: stand. Non-wage income in royalties from the corn baller are $40 a day. a. Find the MU, and MUc. b.…

Q: 5. Donna and Nick both work at the same restaurant. Their wage used to be $12 an hour, but it was…

Q: Carol and Brent are a two-person household. Carol's market hourly wage is $50, but Carol can also…

A: In a market, a firm can be specialized in the production of good or service when it is able to…

Q: President Vladimir Putin of Russia proposed replacing in-kind subsidies such as free public…

A: Subsidy: It refers to the income that is direct and indirect income. This is the income given by the…

Q: Consider the optimal choice of labor and leisure discussed in class and the text. Suppose a consumer…

A: Budget constraint represents all of the combinations of goods and services that a consumer can buy…

Q: What is the difference between the income consumption curve and the Engel curve

A: The Income Consumption curve deserves a relationship between the different levels of consumers'…

Q: Assume that a person earns $10 per hour and her non-labor income increases from $100 to $200. She…

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

Q: 10 10 pearl shakes 6 43 B E C D U₁ 2 cheeseburgers 5 1. Refer to the figure as you answer the…

A: In utility theory, the Lagrange function plays a vital role in solving optimization problems under…

Q: Consider an individual who lives in an economy without a welfare program. They initially work…

A: Answer Explanation Initially the individual will be at the point A where he maximizes utility he…

Q: Refer to Graph 2-2. Which of the following statements is true about the income effect for Good X?…

A: Price effect shows the change in quantity due to change in price. Price effect = Substitution…

Q: C. Let u(x,.x,) =x? x? , the price of x1 equal p1, and the price of X2 equal p2. Income equals M.…

A: U( x1 , x2) = x11/2x21/2 For D part P1 = 4 P2 = 2 M = 1000

Q: A worker earns £15 pounds an hour and chooses to work six hours a day. The worker has no other…

A: Given information W=15 per hour Hours of work=6 hours per day.

Q: Hannah’s wage rate is initially $10 per hour and she maximises her utility by supplying 8 hours of…

A: Given information Initial wage rate=$10 Work hours=8 New wage rate=$15 New work hour=9 Total…

Q: If a budget line is below the indifference curve. What does this mean? Are the points on the…

A: # given the prices of the two goods a budget line always represents the combination of goods which…

Q: Please read the article: Utility of Marriage 1. What is the law of diminishing marginal utility? 2.…

A: Please read the article: Utility of Marriage 1. What is the law of diminishing marginal utility? 2.…

Q: 1) In period t, a parental household equipped with human capital ht earns a labour income of wht,…

A: Utility optimization problem requires a budget constraint involving both the income and expenditure…

Q: Florence is a highly paid fashion consultant who earns $100 per hour. She has 16 hours per day that…

A: The question relates to concept of supply of labour, which is determined by the tradeoff by the…

Q: A worker has no non-labor income and is earning $14/hour. He maximizes utility by working 40 hours…

A: In neo-classical theory of labor-leisure choice, the more a person works, the more he/she will value…

Q: Assume that Anne's wage is 8 units an hour, and she has 12 hours a day to either stay at home or…

A: The budget constraint in the labor leisure model shows optimal hours spent on labor and leisure that…

Question

In California, a welfare recipient can earn $225
per month without having her benefits reduced.
Beyond $225, benefits are reduced by 50 cents
for every dollar of earnings. Consider Elizabeth,
a resident of California, who can earn $10 per
hour. If she does not work at all, she is eligible
for welfare benefits of $645.
a. If she works 10 hours, how much are her
earnings, how much is her welfare benefit,
and how much is her income?
b. After Elizabeth works a certain number of
hours, she does not receive any benefit at
all. What is that number of hours?
c. Use your answer to parts a and b to plot her
budget constraint.
d. Sketch a set of indifference curves consis-
tent with Elizabeth's participating in the
labor market.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

Step 2

Step 3

Step 4

Step 5

Trending now

This is a popular solution!

Step by step

Solved in 5 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Sarah is awake for 100 hours per week. Using one diagram, show Sarah’s budget constraints if she earns $6 per hour, $8 per hour, and $10 per hour. Now draw indifference curves such that Sarah’s labor supply curve is upward sloping when the wage is between $6 and $8 per hour, and backward sloping when the wage is between $8 and $10 per hour.
Marley has 100 hours per week available she can spend either working or doing leisure activities. He can work at a wage rate of $50 per hour. Bob receives $1000 of rental income per week, no matter how much he works. Use leisure-income model to solve this:- i) draw Marley budget line and optimal choice of working 80 hours in a week then calculate the maximum and optimal amount of income ii.) And suppose Marley is suppose to share the household expenses and then be taxed 50% of her wage income. then draw another diagram to compare Marley choice in Part i) and the new labour supply decision of working 90 hours per week due to the tax. Clearly label out the income effect, substitution effect and total effect in the diagram.
List and explain the four (4) properties of the indifference curves Describe the Giffen good and give an example. How do indifference curves represent the consumer's preferences? How do wages affect labor supply?
Help!
Complete each of the following problems showing ALL your work. Answer the following questions Qelated to the utility function: U(x, y) = 0.5x0.40.6 a. Is MRSx,y diminishing, constant, or increasing as the consumer substitutes more x for y along an indifference curve? Explain. b. On a graph with x on the horizontal axis and y on the vertical axis, draw the indifference curves for U1 and U2 where U2 has a higher value than U1.
(a) Carlos has 168 hours per week to divide between labour and leisure. For his job, Carlos is allowed to work up to 60 hours a week earning a wage of $25, but faces a payroll tax of 20%. Given these constraints, Carlos chooses to work 40 hours per week. Graph the budget constraint and indicate the optimal choice, make sure to label all important points. (b) The government proposes a universal basic income whereby everyone is given $200 a week, which is financed by increasing the payroll tax to 40%. Add this new budget constraint to your diagram from (a). Be sure to show all your work/calculations, and label all important points. Is this likely to increase or decrease labour supply for Carlos? Carefully explain. (It is important that you carefully draw your diagram for this question, and compare it to the one in (a)).
There are two consumers, Cindy and Shelly. Cindy’s marginal rate of substitution equals C/L.Shelly’s marginal rate of substitution equals (C – 200)/(L – 80). Assume that each personchooses not to work and that there are 168 hours in a given week. Since Cindy and Shelly arenot working, they qualify for welfare. Assume each individual earns $630 in welfare paymentseach week whether they work or not.(a) Given these numbers, calculate each person’s MRS. Show your work.(b) Using your answer from part (a), graph Cindy’s and Shelly’s indifference curves onthe same set of axes. Label everything.(c) Assume Cindy and Shelly are each offered a job, and they each could earn the samereal wage. Given your answer from part (a), who is more likely to take the job andwhy?
On weekends Andrew likes to download accounting videos from the CICA server. He has symmetric Cobb Douglas preferences, non-labour income of $120 a day and earns a wage of $20 an hour. Accounting videos (X) have a money price of $20 and take him 15 minutesto download and watch. Andrew also purchases Good Y which has amoney price of $40 and a time price of 30 minutes. a. Provide a fully labelled Indifference Curve diagram that applies Becker's model of Time and Money Prices to determine Andrew's optimal consumption as bundle "a". Put Good X on the horizontal axis. b. The CICA increased their price for accounting videos to $60. To make matters worse their server has been running slow. Andrew now spends 2 hours to download and watch an accounting video. Because he is a very good customer the CICA has offered to compensate him. He will be given a few free downloads every day. Show on your diagram from Part a. the minimum number of free videos they would have to offer him as Bundle “b".His…
Economics No needed to answer all these questions, but I'd greatly appriciate if you can answer as much as possbile. Thanks 1. Income insurance. Read Gerald Friedman, “Dog Walking and College Teaching: The Rise of the Gig Economy” a) Use diminishing marginal utility theory to explain why people would prefer stable income to receiving the same total income but with much more variation week to 3 week. b) Would it be desirable to provide workers with some other form of income security? Would you expect private insurance companies to sell such policies (e.g. unemployment insurance?) 2. Financial markets: efficient and other. a) What has happened to the profitability of financial firms in the US economy in recent decades and their profitability relative to other capitalist businesses? b) Would you expect financial firms to make excessive profits under conditions of perfect competition? Why then have financial firms been able to capture unusually high profits? 3. Equilibrium discrimination…
Kimo is a parent who has $200 in non-labor income. Kimo can earn $10 per hour working between 0 and 60 hours in a week if he works. Draw and label clearly the potential income constraint diagram faced by Kimo What is the slope of the budget constraint
Jones, without a job or job prospects, has been on social assistance for the past four months. Social assistance pays a basic benefit of $600 a month with a benefit reduction rate of 75 percent for earned income. Her welfare benefit is given as B = 600 - 0.75E, where E represents monthly earnings. Jones has just been offered a part-time job working 5 hours a day, 5 days a week, earning an hourly wage of $11. Sketch a budget constraint for Jones given the social assistance scheme in place and the wage rate available for part time work. How much income would she earn if she accepted the job? Would Jones still be on social assistance if she took the job? Draw the budget constraint.
Terry attends college and works part-time in a drug store. She can work up to 40 hours each week and is paid $9 per hour. The following table shows her utility from different levels of leisure and income. Refer to the attached picture for the table. 1. Fill in the Marginal Utility columns above. 2. What will be Terry’s total utility from both leisure and income when working 20 hours per week?