Leslie works from home as an IT consultant and consumes only two goods: work (W), which is measured in hours, and consumption (C), which is measured in dollars. Normally she works 40 hours a week and is paid $25 per hour. However, she can be contracted for an additional 30 hours a week at $44 per hour. Leslie cannot work for more than 70 hours a week. For all following questions, round answers to 3 decimal places where necessary.

Leslie works from home as an IT consultant and consumes only two goods: work (W), which is measured in hours, and consumption (C), which is measured in dollars. Normally she works 40 hours a week and is paid $25 per hour. However, she can be contracted for an additional 30 hours a week at $44 per hour. Leslie cannot work for more than 70 hours a week. For all following questions, round answers to 3 decimal places where necessary.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 9PA

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Leslie works from home as an IT consultant and consumes only two goods: work (W), which is measured in hours, and consumption (C), which is measured in dollars. Normally she works 40 hours a week and is paid $25 per hour. However, she can be contracted for an additional 30 hours a week at $44 per hour. Leslie cannot work for more than 70 hours a week. For all following questions, round answers to 3 decimal places where necessary. e) What is the minimum number of hours Leslie must work to attain $2056 of consumption a week? Suppose, in parts ( ƒ ) to (h), that the government subsidises workers' wages at $2 for every hour worked. f) At what level of consumption does the kink in this new budget line occur? g) What is the maximum consumption available to Leslie if she works 70 hours a week given this subsidy? h) How many hours fewer does Leslie need to work to attain the maximum level of consumption she could achieve before the subsidy?
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