Alayna is a 15-year-old girl who stitches footballs at her home in Michigan. Her employer is a
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Question:
- Alayna is a 15-year-old girl who stitches footballs at her home in Michigan. Her employer is a famous supplier of footballs to FIFA. Her father promises her x units of food if she chooses not to work.
a. Putting leisure on the x-axis and food on the y-axis draws her biological survival constraint and her indifference curve.
b. Explain the relative positions of the biological constraint and the indifference curve
c. Assuming that one football is worth 1 unit of food, draw the production frontier
d. Describe how Alaina's employer would figure out the wages (in terms of food) he offers to her. Suppose the wage offered to her is 4x units of food. Label the leisure at this point as 14 hours (i.e. 10 hours of work)
e. Alayna now receives a letter from the Benny Income Support Program (BISP) saying that she will now receive a cheque worth 2x units of food if she is unemployed. Assuming her father will not support her if she gets BISP, illustrate this in your diagram.
f. Do the hours of work reduce or not in response to BISP. Explain why or why not.
Related Book For
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett
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