Bessie, who can currently work as many hours as she wants at a wage of w, chooses to work 10 hours a day. Her boss decides to limit the number of hours that she can work to 8 hours per day. Show how her budget constraint and choice of hours change. Bessie's budget constraint L is illustrated in the figure to the right. For completing the following, assume the indifference curves satisfy the usual assumptions. 1.) Use the 3-point curved line drawing tool to draw an indifference curve for Bessie when she can work as many hours as she wants. Label this curve 1¹ 2.) Use the 3-point curved line drawing tool to draw an indifference curve representing Bessie's utility when she is restricted to work 8 hours per day. Label this curve R₁ Carefully follow the instructions above, and only draw the required objects. Y, Goods per day (-1,19.3) **********..... Time constraint 10 8 L, Leisure hours per day

Bessie, who can currently work as many hours as she wants at a wage of w, chooses to work 10 hours a day. Her boss decides to limit the number of hours that she can work to 8 hours per day. Show how her budget constraint and choice of hours change. Bessie's budget constraint L is illustrated in the figure to the right. For completing the following, assume the indifference curves satisfy the usual assumptions. 1.) Use the 3-point curved line drawing tool to draw an indifference curve for Bessie when she can work as many hours as she wants. Label this curve 1¹ 2.) Use the 3-point curved line drawing tool to draw an indifference curve representing Bessie's utility when she is restricted to work 8 hours per day. Label this curve R₁ Carefully follow the instructions above, and only draw the required objects. Y, Goods per day (-1,19.3) **********..... Time constraint 10 8 L, Leisure hours per day

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Bessie, who can currently work as many hours as she wants at a wage of w, chooses to work 10
hours a day. Her boss decides to limit the number of hours that she can work to 8 hours per day.
Show how her budget constraint and choice of hours change.
Bessie's budget constraint L is illustrated in the figure to the right.
For completing the following, assume the indifference curves satisfy the usual assumptions.
1.) Use the 3-point curved line drawing tool to draw an indifference curve for Bessie when she can
work as many hours as she wants. Label this curve '¹'.
2.) Use the 3-point curved line drawing tool to draw an indifference curve representing Bessie's
utility when she is restricted to work 8 hours per day. Label this curve 'IR¹.
Carefully follow the instructions above, and only draw the required objects.
Y, Goods per day
(-1,19.3)
Time constraint
10
8
L, Leisure hours per day
G
[

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