Suppose that a consumer cannot vary hours of work as he or she chooses. In particular, he or she must choose between working q hours and not working at all, where q > 0. Suppose that dividend income is zero, and that the consumer pays a tax T if he or she works, and receives a benefit b when not working, interpreted as an unemployment insurance payment. a. If the wage rate increases, how does this affect the consumer’s hours of work? What does this have to say about what we would observe about the behavior of actual consumers when wages change? Explained also with the graph b. Suppose that the unemployment insurance benefit increases. How will this affect hours of work? Explain the implications of this for unemployment insurance programs. Explained also with the graph
Suppose that a consumer cannot vary hours of work as he or she chooses. In particular, he or she must choose between working q hours and not working at all, where q > 0. Suppose that dividend income is zero, and that the consumer pays a tax T if he or she works, and receives a benefit b when not working, interpreted as an unemployment insurance payment. a. If the wage rate increases, how does this affect the consumer’s hours of work? What does this have to say about what we would observe about the behavior of actual consumers when wages change? Explained also with the graph b. Suppose that the unemployment insurance benefit increases. How will this affect hours of work? Explain the implications of this for unemployment insurance programs. Explained also with the graph
College Algebra (MindTap Course List)
12th Edition
ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
Publisher:R. David Gustafson, Jeff Hughes
Chapter6: Linear Systems
Section6.8: Linear Programming
Problem 5SC: If during the following year it is predicted that each comedy skit will generate 30 thousand and...
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Suppose that a consumer cannot vary hours of work as he or she chooses. In particular, he or she must choose between working q hours and not working at all, where q > 0. Suppose that dividend income is zero, and that the consumer pays a tax T if he or she works, and receives a benefit b when not working, interpreted as an unemployment insurance payment.
a. If the wage rate increases, how does this affect the consumer’s hours of work? What does this have to say about what we would observe about the behavior of actual consumers when wages change? Explained also with the graph
b. Suppose that the unemployment insurance benefit increases. How will this affect hours of work? Explain the implications of this for unemployment insurance programs. Explained also with the graph
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