2. Amy has a total of 16 hours per day to spend on market and nonmarket...

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2. Amy has a total of 16 hours per day to spend on market and nonmarket work, and has a nonlabor income of $20 per day. She currently works in the labor market and makes a wage rate of $8 per hour. a. Draw Amy's budget constraint, and name it BC1. b. Write out Amy's budget constraint equation. c. If Amy's nonlabor income decreases to $10 per day, how will this affect her budget constraint? Draw her new budget constraint on the graph above, and name it BC2. d. e. Given the change in question c, how will this affect Amy's work hours? If Amy's nonlabor income is still $20 per day, and her wage rate increases to $10 per hour, how will this affect her budget constraint? Draw her new budget constraint on the graph above, and name it BC3. f. Given the change in question e, how will this affect Amy's work hours? 2. Amy has a total of 16 hours per day to spend on market and nonmarket work, and has a nonlabor income of $20 per day. She currently works in the labor market and makes a wage rate of $8 per hour. a. Draw Amy's budget constraint, and name it BC1. b. Write out Amy's budget constraint equation. c. If Amy's nonlabor income decreases to $10 per day, how will this affect her budget constraint? Draw her new budget constraint on the graph above, and name it BC2. d. e. Given the change in question c, how will this affect Amy's work hours? If Amy's nonlabor income is still $20 per day, and her wage rate increases to $10 per hour, how will this affect her budget constraint? Draw her new budget constraint on the graph above, and name it BC3. f. Given the change in question e, how will this affect Amy's work hours?

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a Amys budget constraint B C 1 BC1 is shown below Nonlabor income 20 Labor income 8 16 128 Total inc... View the full answer