Q1: Suppose Labor and Capital are substitutes and the price of capital falls. All else equal, we should expect the labor select (supply, demand) Curve shift select ( up to the right, down to the left ) and for equilibrium wages to select (rise, fall)
Q1: Suppose Labor and Capital are substitutes and the
Q2: An individual has a utility function over Leisure and Income such that ?=?1/2?1/2 This individual has a budget constraint ?=?⋅(24−?)+?
The best possible wage this individual can earn in the labor market is $2 per hour. This individual is $30 in debt (they have negative non-labor income).
If this individual is earning a utility level of 4, which of the following are true?
Group of answer choices
The worker could be supplying 1 unit of Labor
The worker could be earning $10
The worker could be supplying 8 units of labor
The worker is maximizing their utility given their budget
The worker's Marginal Rate of Substitution at the point where the budget constraint intersects the indifference curve is equal to -2
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