Jed is able to earn $8 per hour on the job. Draw his budget constraint assuming 480
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Jed is able to earn $8 per hour on the job. Draw his budget constraint assuming 480 possible work hours per month and that Jed receives no other income. Sketch in an indifference curve showing Jed working 160 hours during the month. Congress passes a law establishing a “guaranteed monthly income” of $1,200. Draw Jed’s new budget constraint. What is likely to happen to Jed’s work hours? (Give your answer in terms of increases or decreases in hours, not an exact number.)
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