Hi

Please assist with the following questions below

John is employed as a consultant for 40 hours a week at a wage rate of R240 per hour worked. John exerts an effort level of 0.7 at work, and this levies a cost equivalent to R85 per hour on him. John knows that if he were to lose his job today, he could claim UIF payments of R75 per hour for 12 weeks, however, it would take John 5 months (20 weeks) to find a new job that would pay him R240 per hour.

(a) Calculate the average value of John's unemployment benefits over his period of unemployment.

(b) With the aid of a clearly labelled diagram, calculate John's total employment rent.

(c) Draw the labour-discipline model representing this scenario. Make sure to label all relevant points and quantities.

(d) Calculate the slope of the firm's isocost curve in this equilibrium. How would you interpret this value?

(e) Imagine that John began negotiations in order to attain a higher wage. His company offers him the following contract: We will pay you a wage of R300 per hour if you are willing to put in an effort level of 0.9.

Would John accept this offer? Please explain briefly.

Thank You

Regards