Consider a consumer who has to choose how much to work. Their preference for consumption and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider a consumer who has to choose how much to work. Their preference for consumption and leisure is given by: U(c, 1) = ln(c-1) + In(1) Assume that the price of consumption is 1, the wage per unit of time is 10 and they don't have any non-labour income. The worker has 1 unit of time available. a) (4) What is the leisure and consumption decision of this worker? b) (4) Suppose the government gives a subsidy of $4 per hours worked from the worker. What would be the direct change from the tax in labour and consumption? c) (4) What is the substitution and income effect from the $4 subsidy? Consider a consumer who has to choose how much to work. Their preference for consumption and leisure is given by: U(c, 1) = ln(c-1) + In(1) Assume that the price of consumption is 1, the wage per unit of time is 10 and they don't have any non-labour income. The worker has 1 unit of time available. a) (4) What is the leisure and consumption decision of this worker? b) (4) Suppose the government gives a subsidy of $4 per hours worked from the worker. What would be the direct change from the tax in labour and consumption? c) (4) What is the substitution and income effect from the $4 subsidy?
Expert Answer:
Related Book For
Posted Date:
Students also viewed these economics questions
-
Assume that the price of a stock remains constant from time period 0 to time period 1, at which time a significant piece of information about the stock becomes available. Draw a diagram that depicts...
-
In Problem 2, assume that the price of the stock was $9 and solve for the expected rate of return from buying the stock. In Problem 2 Assume the next period's dividend is $1, that stockholders...
-
In Problem 1, assume that the price of the stock was $9 and solve for the expected rate of return from buying the stock. In Problem 1 A firm has just paid (the moment before valuation) a dividend of...
-
Dr. Thomas Bilski is a primary care physician with a practice that is currently serving 280 patients. Dr. Bilski would like to administer a survey to his patients to measure their satisfaction levels...
-
Describe the changing roles of a data administrator and database administrator in environment.
-
Samsungs statement of cash flows in Appendix A reports the change in cash and equivalents for the year ended December 31, 2017. Identify the cash generated (or used) by operating activities, by...
-
The following transactions relate to topics in this chapter. a. Coupons published in a newspaper that may be redeemed for merchandise or service. b. Sales taxes payable. c. Probable requirements to...
-
Francis Corporation purchased an asset at a cost of $50,000 on March 1, 2010. The asset has a useful life of 8 years and a salvage value of $4,000. For tax purposes, the MACRS class life is 5 years....
-
Provide the journal entries please. J & M Imports had the following transactions for 2020, their second year of operations. 1. Purchased stock in GE Corp. for $15,000 on February 1 2020. 2. There ...
-
Company A is a global company based in the United States that operates in the financial industry. Company A serves its customers with financial products, such as checking accounts, bank cards, and...
-
Psychometrics of PHQ-9 questionnaire. Explain the reliability and validity of the PHQ-9 assessment. Explain the reliability and validity measures used (ie criterion validity). Your assessment must be...
-
Division A of Azonto Group has investments at the year end of GHS56 million. These include the cast of a new equipment item costing GHS3 million, that was acquired two weeks before the end of is...
-
Find the 20% trimmed mean of the following data. If necessary, round to one more decimal place than the largest number of decimal places given in the data. Lengths of Longest 3-Point Kick for NCAA...
-
ALBANY, N.Y. (AP) Just years after labor activists persuaded a handful of states to raise their minimum wage to $15 per hour, workers initially thrilled with the pay bump are finding their hard-won...
-
A company has the following purchases and sales during October. Using the FIFO periodic inventory method, what is the value of the inventory on October 15 after the sale? Date Activities Units...
-
Conduct a first-hand field research on an off-campus local4 business or non-profit organization with 50 or more employees. The research is expected to turn out a paper focusing on practices of the...
-
Provide the missing data in the following table for a distributor of martial arts products: (Round "Turnover" and "ROI" answers to 1 decimal place.) Alpha Division Bravo Division Charlie Division...
-
To balance the chemical equation SiH3 + O2 SiO2 + HO, you could introduce coefficients a, b, c, d and write aSiH3 + bO2 cSiO + dHO then write linear equations for each element. The equation for Si...
-
Given the following information: a. Rank the portfolios on RVAR. b. Rank the portfolios on RVOL. c. Rank the portfolios on alpha. d. Which portfolio had the smaller nonsystematic risk? e. Which...
-
Assume a 7 percent; 8-year bond has Macaulay duration of 5.6 years and a YTM of 6.5 percent. Calculate the approximate price change for this bond if interest rates decline 110 basis points.
-
Swanton Industries is expected to pay a dividend of $10 per year for 10 years and then increase the dividend to $15 per share for every year thereafter. The required rate of return on this stock is...
-
Create a scenario in which someone is considering a purchase. Discuss the economic, social, and personal factors that will affect this buying decision.
-
Gilda would do anything for Luna, her 11-year-old cat. Until recently, she had been paying an animal hospital \($22.50\) every two weeks for a 10-pound bag of vitamin-enriched organic cat food...
-
What are some typical consumer complaints?
Study smarter with the SolutionInn App