(2) Canada is facing a demographic situation where the baby boomers reaching retirement age in large numbers.

a. Use a simple labour/leisure choice diagram to model the retirement decision, i.e. illustrate the labour supply decision of an individual who is age 64 and working, and then illustrate the same individual at age 65 who is not working (you can use two diagrams, or put both in the same diagram, as you prefer). In your example, what caused the labour supply decision to be different at age 64 and age 65 (change in preferences? change in budget constraint?). Describe what is going on in your example.

b. Suppose the government were to increase pension payments under the Canada Pension Plan. How would this change affect the retirement rate? Illustrate with one or more new labour/leisure choice diagrams. Explain.

c. Suppose large stock market losses reduced people's savings. How would this change affect the retirement rate? Illustrate with one or more new labour/leisure choice diagrams. Explain.

d. What affect do you think the increased labour force participation of women has had on the retirement behaviour of men? Illustrate with a new labour/leisure choice diagram. Explain.

(2) Canada is facing a demographic situation where the baby boomers reaching retirement age in large numbers. a. Use a simple labour/leisure choice diagram to model the retirement decision, i.e. illustrate the labour supply decision of an individual who is age 64 and working, and then illustrate the same individual at age 65 who is not working (you can use two diagrams, or put both in the same diagram, as you prefer). In your example, what caused the labour supply decision to be different at age 64 and age 65 (change in preferences? change in budget constraint?). Describe what is going on in your example. b. Suppose the government were to increase pension payments under the Canada Pension Plan. How would this change affect the retirement rate? Illustrate with one or more new labour/leisure choice diagrams. Explain. c. Suppose large stock market losses reduced people's savings. How would this change affect the retirement rate? Illustrate with one or more new labour/leisure choice diagrams. Explain. d. What affect do you think the increased labour force participation of women has had on the retirement behaviour of men? Illustrate with a new labour/leisure choice diagram. Explain