Frances has 80 hours per week to devote to working or to leisure. She is paid an hourly wage and can work at her job as many hours a week as she likes. The following graph illustrates Frances's weekly income-leisure tradeoff. The three lines labeled BC1, BC2, and BC3 illustrate her time allocation budget at three different wages; points A, B, and C show her optimal time allocation choices along each of these constraints. BC, 1200 BC2 800 В 1 BC 400 0. 35 40 45 LEISURE (Hours) INCOME (Dollars)

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11. The backward-sloping labor supply curve
Frances has 80 hours per week to devote to working or to leisure. She is paid an hourly wage and can work at her job as many hours a week as she
likes.
The following graph illustrates Frances's weekly income-leisure tradeoff. The three lines labeled BC,, BC2, and BC3 illustrate her time allocation
budget at three different wages; points A, B, and C show her optimal time allocation choices along each of these constraints.
BC3
1200
BC2
800
C
BC,
400
A
35 40 45
LEISURE (Hours)
INCOME (Dollars)
ו ם
Transcribed Image Text:11. The backward-sloping labor supply curve Frances has 80 hours per week to devote to working or to leisure. She is paid an hourly wage and can work at her job as many hours a week as she likes. The following graph illustrates Frances's weekly income-leisure tradeoff. The three lines labeled BC,, BC2, and BC3 illustrate her time allocation budget at three different wages; points A, B, and C show her optimal time allocation choices along each of these constraints. BC3 1200 BC2 800 C BC, 400 A 35 40 45 LEISURE (Hours) INCOME (Dollars) ו ם
For each of the points listed, use the preceding graph to complete the following table by indicating the hourly wage at each point and how many hours
per week Frances will spend during leisure activities versus working.
Wage
Leisure
Labor
Point
(Dollars per hour)
(Hours)
(Hours)
A
C
Based on the data you entered in the preceding table, use the orange curve (square symbols) to plot Frances's labor supply curve on the following
graph, showing how much labor she supplies each week at each of the three wages.
24
22
20
Labor Supply
18
16
14
12
8.
6.
2
0.
0 5
20
25
30
35
40
45
50
55
60
LABOR (Hours)
Suppose that Frances's initial budget line was BC2 and that it then changed to BC3; therefore, Frances's optimal time allocation choice shifted from
v leisure. Consequently,
B to C. As a result of this change, Frances's opportunity cost of leisure
and she chose to consume
in this region, the
effect. The corresponding portion of Frances's labor supply curve is
effect dominates the
10
15
WAGE (Dollars per hour)
10
Transcribed Image Text:For each of the points listed, use the preceding graph to complete the following table by indicating the hourly wage at each point and how many hours per week Frances will spend during leisure activities versus working. Wage Leisure Labor Point (Dollars per hour) (Hours) (Hours) A C Based on the data you entered in the preceding table, use the orange curve (square symbols) to plot Frances's labor supply curve on the following graph, showing how much labor she supplies each week at each of the three wages. 24 22 20 Labor Supply 18 16 14 12 8. 6. 2 0. 0 5 20 25 30 35 40 45 50 55 60 LABOR (Hours) Suppose that Frances's initial budget line was BC2 and that it then changed to BC3; therefore, Frances's optimal time allocation choice shifted from v leisure. Consequently, B to C. As a result of this change, Frances's opportunity cost of leisure and she chose to consume in this region, the effect. The corresponding portion of Frances's labor supply curve is effect dominates the 10 15 WAGE (Dollars per hour) 10
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