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(20 marks) Bore and Duck both are endowed with 16 hours of leisure and 0 unearned income. They both face a competitive market wage of
(20 marks) Bore and Duck both are endowed with 16 hours of leisure and 0 unearned income. They both face a competitive market wage of $ 1 00 per hour and chose to work 8 hours in order to maximize his utility. With the COVID l 9 pandemic, their employer cannot offer both of them their current job, one need to be laid off but the government agreed to subsidy all layoff workers' 80% of their income. a. Show diagrammatically that Bore will be better off with the government subsidy than before. b. Duck on the other hand is not happy and would prefer staying on his current job instead. Show diagrammatically why Duck prefer not to be layoff. 0. Explain why both of them choose to work 8 hours initially but prefer differently to the pandemic arrangement
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