Question
Draw the yearly budget constraint between leisure and income for a worker that can earn $40/hr. Assume there are 365 days available each year, and
Draw the yearly budget constraint between leisure and income for a worker that can earn $40/hr. Assume there are 365 days available each year, and each day has up to 16 hours available for work or leisure (8 hours is sleep). Answer the following questions:
- What is the person’s endowment?
- What is the vertical intercept of the budget constraint?
- What is the slope of the BC?
- What is the slope of the new BC if the worker now has 50% wage increase?
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Managerial Economics and Organizational Architecture
Authors: James Brickley, Jerold Zimmerman, Clifford W. Smith Jr
5th edition
73375829, 978-0073375823
