Enthle works in a call center in Woodstock, Cape Town for 45 hours per week. Enthle earns a total of R4 725 per week and exerts an effort level of 0.6. This effort level translates into a disutility of effort cost equal to R35 per hour. In the event that Enthle loses her job, she knows it will take her 6 weeks to find another job at the same pay. UIF provisions also state that Enthle may claim R40 per hour for the first 6 weeks of her unemployment in the event that she loses her job.

(a) Calculate Enthle’s hourly wage. 

(b) What is Enthle’s hourly employment rent? Show your work. 

(c) Using the employment rent model, draw a graph showing Enthle’ssituation graphically. Make sure to label all important points and quantities. 

Assume that call centers across the country decide to implement automatic menus for when customers call in, meaning that the number of call center operators required decreases. This leads to an oversupply of call center workers, and an extension of the expected duration of unemployment for Enthle to 10 weeks. Furthermore, due to the emotional stress of a retrenchment process, Enthle will suffer a psychological cost equivalent to R10 per hour if she loses her job. All other parameters remain unchanged.

(d) Based on this information, what is Enthle’s average net unemployment benefit for her 10 weeks of unemployment? 

(e) Using a carefully labelled diagram of the employment rent model, calculate Enthle’s employment rent in this new scenario.