You currently work for 40 hours a week at wage rate of £12 an hour. Your free hours are defined as the number of hours not in work, which in this case is 24 hours × 7 days – 40 hours = 128 hours per week. Suppose that you are happy to keep your total weekly income constant. Then: To have 12.5% more free time, your wage rate needs to increase by £8. Doubling the wage rate would decrease your working hours by a third. If your wage rate increases to £16 an hour, then your free time will increase by 6%. A wage cut of 25% leaves you with only 100 hours of free time.
You currently work for 40 hours a week at wage rate of £12 an hour. Your free hours are defined as the number of hours not in work, which in this case is 24 hours × 7 days – 40 hours = 128 hours per week. Suppose that you are happy to keep your total weekly income constant. Then: To have 12.5% more free time, your wage rate needs to increase by £8. Doubling the wage rate would decrease your working hours by a third. If your wage rate increases to £16 an hour, then your free time will increase by 6%. A wage cut of 25% leaves you with only 100 hours of free time.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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You currently work for 40 hours a week at wage rate of £12 an hour. Your free hours are defined as the number of hours not in work, which in this case is 24 hours × 7 days – 40 hours = 128 hours per week. Suppose that you are happy to keep your total weekly income constant. Then:
To have 12.5% more free time, your wage rate needs to increase by £8.
Doubling the wage rate would decrease your working hours by a third.
If your wage rate increases to £16 an hour, then your free time will increase by 6%.
A wage cut of 25% leaves you with only 100 hours of free time.
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