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) A. In an effort to raise revenues, the government is considering raising income taxes on workers like Maria. How would a higher tax change Maria's budget constraint?
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) A. In an effort to raise revenues, the government is considering raising income taxes on workers like Maria. How would a higher tax change Maria's budget constraint?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![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)
A. In an effort to raise revenues, the government is considering raising income
taxes on workers like Maria. How would a higher tax change Maria's budget
constraint?
a. The budget constraint would be unchanged.
altr
b. The slope would be unchanged but the line will shift out.
c. The slope would be unchanged but the line will shift in.
d. The slope would become steeper.
e. The slope would become flatter.
Explain your reasoning for part A (above) using economic concepts:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faac0e756-a111-4d7f-8d3f-ca69f5a2ab56%2Fa9c073a6-5364-451a-94fa-3592b7245590%2Fhmgzs1_processed.jpeg&w=3840&q=75)
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)
A. In an effort to raise revenues, the government is considering raising income
taxes on workers like Maria. How would a higher tax change Maria's budget
constraint?
a. The budget constraint would be unchanged.
altr
b. The slope would be unchanged but the line will shift out.
c. The slope would be unchanged but the line will shift in.
d. The slope would become steeper.
e. The slope would become flatter.
Explain your reasoning for part A (above) using economic concepts:
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