Reference no: EM132504895

A local professor is currently paying her research assistants (RAs) a constant wage of w. The research assistants are working eight hours per day. The local professor has a deadline coming up and wants her RAs to work overtime (more than eight hours per day). To accomplish this she is thinking of adopting one of the following plans: a. Offer each RA a wage w' > w. b. Offer each RA an overtime rate of w' > w where w' is paid for each hour worked after eight. Which plan should the professor use if she wants to guarantee the RAs will work more than eight hours per day? Justify your answer using indifference curves and budget constraints where the two goods are "income" (on the vertical axis) and "Hours of leisure" (on the horizontal axis), both measured per day.