Maria earns $15 per hour in her current job and works 40 hours a week. Her disutility of effort is measured as $1 per hour of work. In the case that she loses her job, she receives $5 per hour unemployment benefit. Additionally, being unemployed has psychological and social costs which is a disutility equivalent to $2 per hour. Which of the following statements is correct? Include a brief explanation (one sentence and/or equation) to justify why each statement is correct or incorrect. A). Her employment rent per hour is $3. B). If she can get another job with the same wage rate and weekly hours after 44 weeks of being unemployed, Maria’s total employment rent is more than $10,000. C). If the unemployment benefits she could receive if she lost her job increased to $7/hour, her employment rent would also increase. D). If her disutility of effort at her current job increased to $4/hour, her employment rent increases
Maria earns $15 per hour in her current job and works 40 hours a week. Her disutility of effort is measured as $1 per hour of work. In the case that she loses her job, she receives $5 per hour
A). Her employment rent per hour is $3.
B). If she can get another job with the same wage rate and weekly hours after 44 weeks of being unemployed, Maria’s total employment rent is more than $10,000.
C). If the unemployment benefits she could receive if she lost her job increased to $7/hour,
her employment rent would also increase.
D). If her disutility of effort at her current job increased to $4/hour, her employment rent increases.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
