A standard consumption-leisure choice model

Assignment Help Microeconomics

Reference no: EM13899558

Consider a standard consumption-leisure choice model where the worker supplies labor by reducing leisure in order to buy consumption goods. If employed income consists only of labor earnings. If unemployed, the worker receives unemployment benefits. There is a simple proportional tax on labor income. Suppose the tax rate on labor income is increased. Framing the discussion in terms labor income. Suppose the tax rate on labor income is increased. Framing the discussion in terms od income and substitution effects, discuss the labor supply response in the following two cases,

1. A Worker who prior to the tax rate change is supplying a strictly positive amount of labor.

2. A worker who prior to the tax rate change is unemployed.

Reference no: EM13899558

Questions Cloud

How could the adequacy of street lighting be measured : How could the adequacy of street lighting be measured? What performance measures might be used by a famine relief charity?

How could management accounting system foster such a culture : How could a management accounting system foster such a culture, or undermine it? What do you conclude are the two main means of measuring service quality at BAA?

Why the current accounting system fails to highlight cost : Briefly discuss why the current accounting system fails to highlight the cost of quality. Give one example of a cost of quality not normally identified by the accounting system.

How can a clothing store ensure they order a mix of clothing : How can a clothing store ensure they order a mix of clothing that will sell through when consumer demand surges during cyclical phases

A standard consumption-leisure choice model : Consider a standard consumption-leisure choice model where the worker supplies labor by reducing leisure in order to buy consumption goods. If employed income consists only of labor earnings. If unemployed, the worker receives unemployment benefits. ..

Calculate figures that illustrate competitiveness : Consider how the factors intangibility, simultaneity, perishability, no transfer of ownership and heterogeneity apply. Calculate figures that illustrate competitiveness and resource utilisation.

4 units of education obtain w : Consider a simple model with 2 types : high (H) ability and low (L) ability. In this economy, those who do not go to college earn $10. Those who obtain 4 units of education obtain W*. For H types, the cost of education is C (h)= (1/2) U^2

Describe expansionary and contractionary fiscal policies : Begin by explaining fiscal policy.Describe expansionary and contractionary fiscal policies. Identify the situations in which expansionary fiscal policy and contractionary fiscal policy would be used.

Why is it that calculated income multipliers : 1. Why is it that calculated income multipliers are often overestimated? 2. Which Fed policy is easier to implement, targeting the Federal funds rate or targeting the money supply? Elaborate on why this is.

User Account

All Pages