B. If Maria were to work more hours in response to the higher tax, does this mean that leisure must be an inferior good for Maria? Use economic concepts to explain:

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Maria can work up to 40 hours per week at Sparkle, one of many competitive
firms that make and sell hand-crafted jewelry and pay $25 per hour. The
budget constraint below shows the tradeoff that she faces in terms of earnings
versus leisure each week.
S earnings
$1,000
Maria's weekly budget constraint
40
leisure (hours)
Transcribed Image Text:Maria can work up to 40 hours per week at Sparkle, one of many competitive firms that make and sell hand-crafted jewelry and pay $25 per hour. The budget constraint below shows the tradeoff that she faces in terms of earnings versus leisure each week. S earnings $1,000 Maria's weekly budget constraint 40 leisure (hours)
B. If Maria were to work more hours in response to the higher tax, does this
mean that leisure must be an inferior good for Maria? Use economic concepts
to explain:
Assume government officials decide to drop their proposal to raise taxes on
workers like Maria.
C. It turns out that making beaded bags requires job skills similar to those of
hand-crafted jewelry workers. But, in contrast to firms producing hand-crafted
jewelry, firms producing beaded bags offer their workers paid vacation days.
What wage do you think firms in the beaded bag industry pay? Explain your
reasoning using economic concepts:
Transcribed Image Text:B. If Maria were to work more hours in response to the higher tax, does this mean that leisure must be an inferior good for Maria? Use economic concepts to explain: Assume government officials decide to drop their proposal to raise taxes on workers like Maria. C. It turns out that making beaded bags requires job skills similar to those of hand-crafted jewelry workers. But, in contrast to firms producing hand-crafted jewelry, firms producing beaded bags offer their workers paid vacation days. What wage do you think firms in the beaded bag industry pay? Explain your reasoning using economic concepts:
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