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Suppose that the owner of Boyer Construction is feeling the pinch of increased premiums associated with workers' compensation and has decided to cut the wages
Suppose that the owner of Boyer Construction is feeling the pinch of increased premiums associated with workers' compensation and has decided to cut the wages of its two employees (Albert and Sid) from $22 per hour to $17 per hour. Assume that Albert and Sid view income and leisure as "goods," that both experience a diminishing rate of marginal substitution between income and leisure, and that the workers have the same before- and after-tax budget constraints at each wage. Albert and Sid's opportunity set is presented below: A graph titled Albert and Sid's opportunity set."The horizontal axis labeled leisure hours ranges from 0 to 30 in increments of 5. The vertical axis is labeled income. A line begins at point A on the vertical axis goes down to the right and ends at the point (25, 0)." What is the value of A when the wage is $22? (Assume a 24-hour work day.) 528 What is the value of A when the wage is $17? (Assume a 24-hour work day.) 408 At the wage of $22 per hour, both Albert and Sid are observed to consume 13 hours of leisure (and equivalently supply 11 hours of labor). After wages were
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