Reference no: EM132813393
1. In the year 2010, the government decided to construct a thermal plant in a small town. Discuss its impact on equilibrium wage in the small town in the short and long-term.
2. Kwabena earns $15 per hour for up to 40 hours of work each week. He is paid $30 per hour for every hour in excess of 40. Kwabena faces a 20 percent tax rate. Kwabena receives $80 from the government as part of the Livelihood Empowerment Against Poverty (LEAP) program which is tax-free. There are 110 (non-sleeping) hours in the week. Graph Kwabena's weekly budget line.
3. Suppose that the supply curve for private schoolteachers is Ls = 20,000 + 350W, and the demand curve for such schoolteachers is Ld = 100,000 - 150W, where L = the number of teachers and W = the daily wage.
(a). Plot the supply and demand curves.
(b). What are the equilibrium wage and employment levels in this market?
(c). What will be the effect on labour demand and supply if the government imposes a minimum wage of 200 GHS.
4. Akua gains utility from consumption C and leisure L. The most leisure she can consume in any given week is 110 hours. Her utility function is U (C, L) = C × L. Akua receives $660 each week from her great-grandmother-regardless of how much she works.
(a). What will be Akua's marginal rate of substitution.
(b). What will be Akua's reservation wage? (Explain in detail)