PLCY 310 Problem Set 2 SSII Extra credit (5 points) Use these graphs to answer the following: weekly $'s consumption wage 25 20 wage- 25 wage- 20 5 10 15 20 25 30 35 40 45 50 55 60 week hrs of leisure B labor supply curve SE WE 5 10 15 20 25 30 35 40 45 50 55 60 week hrs of labor a) Analyze what is happening on the first graph (use slide 9 Chapter 9 as guide), go over the price change, the income and substitution effects, and the total effect. (3 points) b) Explain the bottom graph, what does it tell us? (1 point) c) Draw a leisure demand curve with wages on the y-axis and weekly leisure hours on the x-axis using the information in this graph. (1 point)
PLCY 310 Problem Set 2 SSII Extra credit (5 points) Use these graphs to answer the following: weekly $'s consumption wage 25 20 wage- 25 wage- 20 5 10 15 20 25 30 35 40 45 50 55 60 week hrs of leisure B labor supply curve SE WE 5 10 15 20 25 30 35 40 45 50 55 60 week hrs of labor a) Analyze what is happening on the first graph (use slide 9 Chapter 9 as guide), go over the price change, the income and substitution effects, and the total effect. (3 points) b) Explain the bottom graph, what does it tell us? (1 point) c) Draw a leisure demand curve with wages on the y-axis and weekly leisure hours on the x-axis using the information in this graph. (1 point)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:PLCY 310
Problem Set 2
SSII
Extra credit (5 points)
Use these graphs to answer the following:
weekly $'s
consumption
wage
25
20
wage- 25
wage- 20
5 10 15 20 25 30 35 40 45 50 55 60 week
hrs of leisure
B
labor
supply
curve
SE
WE
5 10 15 20 25 30 35 40 45 50 55 60 week
hrs of labor
a) Analyze what is happening on the first graph (use slide 9 Chapter 9 as guide), go over
the price change, the income and substitution effects, and the total effect. (3 points)
b) Explain the bottom graph, what does it tell us? (1 point)
c) Draw a leisure demand curve with wages on the y-axis and weekly leisure hours on
the x-axis using the information in this graph. (1 point)
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