Suppose your only source of income is work and that you are paid $20 per hour. This determines a budget constraint. You can buy free time at the expense of your income by working less. Likewise, you can get more income at the expense of your free time by working more. Suppose that you can choose how many hours you work. - work 40 hours per week. Now suppose that your hourly rate drops to $15 because of an economic downturn and you decide to work 43 hours a week. 3. Calculate the hours of free time you had before and after the pay rate changed. (Show your calculations)
Suppose your only source of income is work and that you are paid $20 per hour. This determines a budget constraint. You can buy free time at the expense of your income by working less. Likewise, you can get more income at the expense of your free time by working more. Suppose that you can choose how many hours you work.
- work 40 hours per week. Now suppose that your hourly rate drops to $15 because of an economic downturn and you decide to work 43 hours a week.
3. Calculate the hours of free time you had before and after the pay rate changed. (Show your calculations)
Calculate the Hours of free time
Before changed you have 40 hours at the rate of $20 per hour
After changed you have 43 hours at the rate of $15 per hour
Hours of free time = old hours - new hours
Hours of free time= 40 - 43
Hours of free time= -3 hours
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
