A single mother has 80 works a week available for work or leisure. She could earn $20
Question:
A single mother has 80 works a week available for work or leisure. She could earn $20 an hour. She has $800 a week in nonlabor income. If she works she must spend $300 a week on childcare regardless of how many hours she works.
a) Draw her budget constraint. Be sure to clearly indicate every possible point including if she does not work.
b) Add a set of indifference curves such that she works 50 hours a week
c) The government decides to make childcare free. If she was previously working 50 hours a week what will happen to her labor supply? Why? (Please show the new equilibrium on your graph in part a
d) The government decides to make childcare free. If she was previously working 0 hours a week what will happen to her labor supply? Why? (You can add indifference curves to your budget constraint in part a)
Applied Calculus
ISBN: 9781119275565
6th Edition
Authors: Deborah Hughes Hallett, Patti Frazer Lock, Andrew M. Gleason, Daniel E. Flath, Sheldon P. Gordon, David O. Lomen, David Lovelock, William G. McCallum,