Judys has 16 effective number of hours available per day. Her current wage, w, is $50 per
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Question:
Judy’s has 16 effective number of hours available per day. Her current wage, w, is $50 per hour. Currently in equilibrium she spends 10 hours per day working while the remaining time she spends doing house chores.
a. Graphically show this information
b. How would a tax of $5 per wage change the equilibrium? Show clearly.
c. How does a tax change the Pareto efficiency condition?
d. Calculate the deadweight loss?
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