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Consider the labor-leisure budget constraint that this person faces in a situation without government assistance.

Suppose that this person spends 1 hours on leisure. How many hours then is she working?

Hint




Consider the labor-leisure budget constraint that this person faces in a situation without government assistance.

What is the wage rate (how much does this person earns per hour)?




Consider the labor-leisure budget constraint that this person faces in a situation without government assistance.

Suppose that this person spends 1 hours on leisure. What is her income?






Suppose that the hourly wage is $30. In addition, suppose that a person has 25 hours to allocate between leisure and labor. Finally, suppose that this person decided to spend 9 hours on leisure.

Given this information, for how many hours does she work?

 

Hint


Suppose that the hourly wage is $25. In addition, suppose that a person has 40 hours to allocate between leisure and labor. Finally, suppose that this person decided to spend 10 hours on leisure.

Given this information, what is her income?

 

Hint


Suppose that a government antipoverty program guarantees every family with a single mother and two children $30000 in income. With this program, each time the mother earns $1,000, the government will deduct $1,000 of its support. Suppose that the hourly wage is $8.25. Given this data, complete the table:





Amount Worked (hours) Total Earnings Government Support Total Income
0
500
1000
1500
2000
2500
3000


Hint


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