Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN: 9781305506725
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 7, Problem 17CQ
To determine
Identify the job offer that maximizes the
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Jayden's grandmother gives him $240$240 each month, which he spends on pizzas and burgers. Usually, he buys 44 pizzas for $180$180 and spends the remaining $60$60 on 44 burgers. However, the price of 11 pizza has increased by $5$5; the price of a burger has not changed. Now, Jayden will buy only 33 pizzas per month.Calculate how many burgers Jayden can afford to buy if he still wants to spend all the money. If necessary, round any intermediate calculations to two decimal places. For your final answer, write the exact value; do not round.
A family with a monthly income of $2200 spends $850 for rent $225 for utilities and $325 for food. What percent of the family income is spent for cach?
Consider a worker who earns $20/hour in the labor market and receives $50 per week in non-labor income. Assume the total number of hours available for work (h) and leisure (L) is 168 hours per week (i.e., ? = 168 = ℎ + ?).
What is the maximum value of consumption that this individual could achieve in a week?
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Economics: Private and Public Choice (MindTap Course List)
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- write it out pleasearrow_forwardFind Katie’s optimal amount of consumption and leisure.arrow_forwardFill in the blanks and round to 2 decimals where needed. Katie has 75 hours per week to allocate to leisure or work. She has a job that pays $30 per hour, she has $150 nonlabour income per week and the price of the (composite) consumption good is p=$1. Her preferences are given by U(C,L) = ½ C L. Katie's reservation wage is $ 30 and she prefers to work 87.5 hours per week. If Katie's nonlabour income rises to $210, she would prefer to work 68 hours per week. If Katie's hourly wage was to rise to $40, she would prefer to work 72 hours per week (with the original Yn=150). Considering the change in hours in response to the wage rise, the effect clearly dominates the effect.arrow_forward
- Discuss the possible substitution effect and the income effect of an increase in income on leisure time.arrow_forwardFind MPS if change in Savigs is $430 and the change in income is $550arrow_forwardJack's marginal utility of consumption is MUc = L - 6, and the marginal utility of leisure is MUL=C-40. Jack does not have any nonlabor income, i.e., V = 0. Jack faces a $48 an hour wage rate. Jack's total number of hours available per week is 150. What is Jack's optimal choice of consumption? (calculate to 2 decimal places)arrow_forward
- Dr.Farida is planning for her requirements. Suppose she can consume her salary of Rs. 100,000 while she is in service or save her salary to consume it after retirement. When she saves her salary she will get 10% interest on it. Draw Dr. Farida's budget constraint, her indifference curve and her optimum. If interest rate goes upto 20%, draw figures to show when she will save more and when she will save less.arrow_forwardA worker has no non-labor income and is earning $14/hour. He maximizes utility by working 40 hours per week. Begin by drawing a graph that illustrates this to be the utility-maximizing solution. The same worker loses his job. He is entitled to unemployment compensation that will pay up to 50% of his weekly earnings. The worker has an opportunity to supplement his unemployment compensation by taking a job that pays $7/hour. Using the same graph, show the worker's new budget line and his utility-maximizing decision as whether to work the new job and how many hours to work. Make sure your graph shows the relevant budget lines and indifference curves.arrow_forwardWhat is full price vs full income in household economics?arrow_forward
- 5. Rhoda’s preferences for consumption and leisure can be expressed as U(C, L) = (C - 100) × (L - 40). There are 110 (non-sleeping) hours in the week available to split between work and leisure. Rhoda earns 10 GHS per hour after taxes. She also receives 320 GHS worth of support from her parents each week regardless of how much she works.a. What will be Rhoda’s marginal utility of leisure and her marginal utility of consumption?b. What is Rhoda’s marginal rate of substitution when L = 100 and she is on her budget line?c. Find Rhoda’s optimal amount of consumptionarrow_forward5. Rhoda’s preferences for consumption and leisure can be expressed as U(C, L) = (C - 100) × (L - 40). There are 110 (non-sleeping) hours in the week available to split between work and leisure. Rhoda earns 10 GHS per hour after taxes. She also receives 320 GHS worth of support from her parents each week regardless of how much she works.a. What will be Rhoda’s marginal utility of leisure and her marginal utility of consumption?b. What is Rhoda’s marginal rate of substitution when L = 100 and she is on her budget line? c. Find Rhoda’s optimal amount of consumption.arrow_forwardFind the level of savings when consumption is $610 and the income is $111arrow_forward
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