What is the new optimal bundle

Reference no: EM133662532

Assignment:

In the article on Walmart, it was noted that the average hourly wage was increasing from $17.50 to $18.

a. Draw a worker opportunity line (with daily income on vertical axis and daily leisure hours on horizontal axis) for a $17.50 wage. Draw a generic indifference curve and label the optimal bundle of labor and leisure.

b. Suppose the hourly wage increases to $18. Draw the new worker opportunity line. What is the new optimal bundle? How does it compare? Why might you get this result?

Reference no: EM133662532

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