Suppose that a consumer can earn a higher wage rate for working overtime. That is, for the first q hours the consumer works, he/she receives a real wage rate of w1, and for hours worked more than q he/she receives w2, where w2> w1. Suppose that the consumer pays no taxes and receives no non - wage income, and he/she is free to choose hours of work. a. Draw the consumer's budget constraint, and show his/her optimal choice of consumption and leisure. Hint: think of the slope of the budget constraint for levels of leisure less than h* - q (due to higher overtime wage) and for levels of leisure higher than h*- q. b. Determine what happens if the overtime wage rate w2 increases. Explain your results in terms of income and substitution efects. Hint: you must consider the case of a worker who initially works overtime, and a worker who initially does not work overtime.

Suppose that a consumer can earn a higher wage rate for working overtime. That is, for the first q hours the consumer works, he/she receives a real wage rate of w1, and for hours worked more than q he/she receives w2, where w2> w1. Suppose that the consumer pays no taxes and receives no non - wage income, and he/she is free to choose hours of work. a. Draw the consumer's budget constraint, and show his/her optimal choice of consumption and leisure. Hint: think of the slope of the budget constraint for levels of leisure less than h* - q (due to higher overtime wage) and for levels of leisure higher than h*- q. b. Determine what happens if the overtime wage rate w2 increases. Explain your results in terms of income and substitution efects. Hint: you must consider the case of a worker who initially works overtime, and a worker who initially does not work overtime.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

please explain how the first two answer are obtain
What are the properties of Ordinary Least Squares (OLS) estimators in basic econometrics? Discuss. (Maximum 250 words)
What is the difference between univariate and multivariate analysis? Give an example for when a univariate analysis might be used and an example of when we use multivariate analysis.
For a reaction A products, sicessive half_For a reaction A→ products, successive half-lives are observed to be 10.0,20.0 and 40.0 min for an experiment in which the initial concentration of A=0.10M. Calculate the concentration of A(M) after 39.37 minutes. Report your answer to 4 significant fgures.
Find MPC if MPS Is 0.18
DEPENDENT VARIABLE Qc R- SQUARE P- VALUE ON F 64 0.8093 0.0001 INDEPENDENTVARIABLE PARAMETER ESTIMATE STANDARD ERROR T-RATIO P-VALUE INTERCEPT 8.20 4.01 2.04 0.0461 PC -3.54 1.64 -2.16 0.0357 M 0.64287 0.19 3.38 0.0014 PA 0.7854 0.38 2.07 0.0439 10. Write the resulting regression equation. Q = f( P, M, PR) where Qc = demand for cement/month (in yards) Pc = the price of cement per yard, M = country’s tax revenues per capita, and PR = the price of asphalt per yard.
Plz solve correctly
7
Gg.207.
A sheep farmer has 200 sheep in his flock. Helminthiasis is a problem in his flock & causes a mortality of 5% per year. He want to implement a strategic deworming by dosing his sheep two times a year. By doing so the farmer could be able to reduce the mortality due to helminthosis from 5% to 0%. The average price a sheep in the farm is 800 birr. When a sheep died due disease problem the skin can be sold at price of 100 birr per skin. The overall cost of deworming per year per sheep is 20 birr. Conduct economic analysis to determine whether strategic deworming is economically useful to the farm.
Over a relatively short time horizon demand for petrol is likely to be inelastic with respect to price. But over the longer term, as motor vehicle owners have the scope to change to other types of fuel such as gas, demand for petrol will be more elastic with respect to price. Group of answer choices! aTrue b.False
With respect to a given product, describe the connection that exists between equalibrium/disequalibrium and prediction. cite an unique example