Question
The graph below shows a worker's budget constraint. The worker is paid a straight hourly wage. Use the graph to answer questions 3 to 6.
The graph below shows a worker's budget constraint. The worker is paid a straight hourly wage. Use the graph to answer questions 3 to 6.
*I need only Question 6: What I am asking is: At what dollar value does the worker decide that they are better off NOT working. I.e. They prefer staying on unemployment to working at the job.So if the worker was unemployed and getting $5 per week in unemployment insurance benefits, he or she would prefer to be back at their job, working the hours and receiving the consumption from questions 4 & 5. What about with $20 in benefits? $50 in benefits? I am looking for the dollar amount at which the worker switches from wanting to work, to preferring NOT working and receiving his or her unemployment insurance benefit.
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