Individual is faced with two goods-income and leisure

Assignment Help Business Economics

Reference no: EM13733304

Suppose an individual is faced with two goods: income and leisure. The basic wage rate is 8 dollars per hour but if the individual works more than 8 hours a day, he or she get's an overtime pay of $12 .

a. Draw the budget line for this individual.

b. Show how a change in the overtime rate may lead to a "big" change in the number of hours for which the consumer would like to work.

Reference no: EM13733304

Questions Cloud

Extensive financial and commercial networks linking nations : What are some of the main advantages and disadvantages of the extensive financial and commercial networks linking nations today?

About the potential benefits and costs of diversification : Economists argue about the potential benefits and costs of diversification. For instance, while diversification can certainly help company to promote new products, at the same time through the merger of two firms it can be more expensive to develop c..

What is the price elasticity of demand if the price of good : The market demand for a product is given by: Q= 300 - 5P + Y. Where why is average consumer income? The current level of income is 200. What is the price elasticity of demand if the price of the good is $20.00?

The reservation wage is shown : Graphically, the reservation wage is shown by:

Individual is faced with two goods-income and leisure : Suppose an individual is faced with two goods: income and leisure. The basic wage rate is 8 dollars per hour but if the individual works more than 8 hours a day, he or she get's an overtime pay of $12. Draw the budget line for this individual.

What is the determinant that has caused the shift : Find an article (newspaper, magazine, or online) that identifies a shift change in supply and demand. Use the article to answer the questions: Indicate if the shift has already occurred, maybe occurring currently, or may occur in the future. Is the m..

Focusing only on the price effect and ignoring the quantity : Skyscraper City has a subway system, for which a one-way fare is $1.50. There is pressure on the mayor to reduce the fare by one-third, to $1.00. The mayor is dismayed, thinking that this will mean Skyscraper City is losing one-third of its revenue f..

Corporations structure and culture be internal strengths : In what ways may a corporation’s structure and culture be internal strengths or weaknesses? Look at your organization, and analyze its structural and cultural strengths and weaknesses. How can the weaknesses be improved?

Demand definitely predict for the cement market : If an earthquake decreases cement supply by disabling a major cement plant and increases demand by necessitating repair jobs, what does the model of supply and demand definitely predict for the cement market?

User Account

All Pages