Then consider an individual with the exact same indifference curve map as in the previous question) and skills, this person happened to have a better connection with a com and is earning a higher wage than the individual in part 'a'. Thu this person faces budget line BL' below and takes l'hours of leisure (works T - l'hours).
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- Anya is awake for 100 hours per week. Using onediagram, show Anya's budget constraints ii sheearns $12 per hour, Sl6 per hour, and $20 per hour.Now d raw indifference curves such that Anya'slabor-suppl}' curve is upward-sloping whenthe wage is between $12 and $16 per hour andbackward-sloping when the wage is between $16and S20 per hou.tHannah’s wage rate is initially $10 per hour and she maximises her utility by supplying 8hours of work. Subsequently, her wage rate increases to $15 per hour and her newequilibrium position corresponds to 9 hours of work. It is noted that the income effect (IE)causes the labour supply to change by 1 hour and the substitution effect (SE) causes thelabour supply to change by 2 hours. How to draw in diagram, to show the IE and SE?My Moodle My Favou tion 6 An individuals utility function is given by ret rered U = 340x1 + 960x2 + 2x1x2 – 2a- a/2, ed out of when the weekly amount of leisure is x1 132 and earned income is 12 = 760 answer the following: 1. The marginal utility of x1 is ag tion 2. The marginal utility of x2 is 3. Use the small increments formula to estimate the change in the utility when r1 decreases by 1 and x2 increases by 4. The change = 4. Does the law of diminishing marginal utility hold? 5. The MRCS at a given values is Enter non-integer numerical values as decimals to at least 3 decimal places. Note: you must use a. and not , for a decimal point. Next page revious page Mock paper ► - Working from video in SVG Jump to... format
- Consider a parent, with $200 in nonlabor income per week, who can earn $10per hour working between 0 and 60 hours per week. If this parent decides to work at allthen high-quality day care will cost a fixed $100 per week. a) Draw the budget line for this parent.Question Recently, the owner of KFC Franchise decided to change how she compensated hertop manager. Last year, the manager received a fixed salary of GHC50,000 and KFCmade GHC110,000 in profits (excluding the manager’s compensation). She fearedthat her store’s performance was connected to the top manager shirking on the joband expected that changes to her top manager’s compensation structure wouldimprove sales. Therefore, this year she decided to offer him a fixed salary of $40,000plus 5 percent of the store’s profit. Since the change, the store is performing muchbetter, and she forecasts profits this year to be $300,000 (again, excluding themanager’s compensation). Assuming the change of compensation is the reason for the increased profits, and the forecast is accurate, how much more money will theowner make (net of payment to her top manager) because of this change?Does the manager make more money under the new payment scheme?Select below the answer that best completes the sentence. When an individual decides to allocate their time between labour and leisure, the opportunity cost of leisure is due to the fact that: O leisure reduces how much time left the individual has for consumption. O every hour of leisure is an hour not earning labour income. O leisure decreases the marginal utility of consumption. O most leisure activities are costly.
- According to the Wall Street Journal, Mitsubishi Motors recently announced a major restructuringplan in an attempt to reverse declining global sales. Suppose that as part of the restructuring planMitsubishi conducts an analysis of how labour and capital are used in its production process. Priorto restructuring Mitsubishi’s marginal rate of technical substitution is 0.15 ( in absolute value). Tohire workers. Suppose that Mitsubishi must pay the competitive hourly wage of US$ 15. In thestudy of production process and markets where capital is procured, suppose that Mitsubishidetermine that its marginal productivity of capital is 0.5 small cars per hour at its new targetedlevel of output and that capital is procured in a highly competitive market. The same studyindicates that the average selling price of Mitsubishi’s smallest car is US$ 9500. Determine therate at which Mitsubishi can rent capital and marginal productivity of labour at its new targetedlevel of output. To minimize costs…Explain how the wage can adjust to balance thesupply and demand for labor while simultaneouslyequaling the value of the marginal product oflabor.. An individual's utility function is given by u = 1000 x, + 450 x. + 5x, x. - 2x-x where x, is the amount of leisure measured in hours per week and x,is income earned measured in cedis per week. Det er mine the value of the marginal utilities, when x, = 138 and x= 500. Hence est imate the change in utility if the individual works for an extra hour, which increa ses earned income by GH¢ 15 per week. Does the law of diminishing ut ility hold for this function? %3D
- )ncob buys only milk and cookies.a. In yeor 1, Jocob earns $100, milk costs $2 perqua rt, and cooki es cost S4 per dozen. Ora\"•jacob's budget constraint.b. Now suppose that a ll prices increase by10 percent in yeor 2 ond !hot jacob's salaryincreases by 10 percent as well. Draw jacob'sn<:w budget constraint. How would Jacob'soptimnl combination of milk and cookies in year 2compare to his optimal combination in year 17w ouseunus varI EUITE wrien purchase in factor markets. rirms factors Suppose Eleanor earns $550 per week working as a corporate attorney for Rowan and Martin Associates. She uses $10 to get her car washed at Spotless Car Wash. Spotless Car Wash pays Darnell $400 per week to wash cars. Darnell uses $375 to purchase legal service from Rowan and Martin Associates, Identify whether each of the following events in this scenario occurs in the factor market or the product market. Event Factor Market Product Market Eleanor earns $s50 per week working for Rowan and Martin Associates. Darnell spends $375 to purchase legal service from Rowan and Martin Associates, Eleanor spends $10 to gether car washed. oloD E B 04 What does point D on this graph represent? O An optimal choice O A choice on the budget constraint O An impossible choice given the income O A choice that would result in income left over