Question: If h rises ( the total hours available ) in the economy, summarize the direct effects on labor supply and labor demand, the direction of
If hrises the total hours available in the economy, summarize the direct effects on labor supply and labor demand, the direction of the indirect effect, the effect on key equilibrium variables, and state whether the resulting equilibrium is efficient.
I was wondering whether the PPF has a parallel shift outward or proportionately when h rises? Since his an exogenous variable in the consumer's decision problem, I understand that it directly affects the labor supply curve. However, Im unsure about how this change would visually look on the oneperiod equilibrium model.
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