Question
There have been suggestions that the work ethic in the U.S. has declined. The claim is that, as a result, people are choosing to work
There have been suggestions that the "work ethic" in the U.S. has declined. The claim is that, as a result, people are choosing to work fewer hours (at a given wage rate and level of unearned income) than did individuals in the past. This can be indicated by changes in individuals' indifference curves.
a. Show such a change in indifference curves on graph with the consumption good on the Y-axis and leisure on the X-axis. How does the slope of the indifference curve change at a given level of leisure? (It may be useful to draw a simple budget constraint to indicate the change in hours of work.)
b. Since Congress is concerned about people slipping into poverty, a law is passed requiring that, if work is available, all individuals without child care responsibilities (who are not in school) who work at all must work at least 35 hours per week. Imagine the law "works," and the average income for those originally working less than 35 hours per week increases by 10 percent. Indicate whether individuals are made better off by the law. Explain your answer, illustrating it graphically, if possible.
c. Is it possible that some individuals choose to leave the labor market after the law in (b) is passed? Illustrate your answer graphically, if possible.
Please give me the correct answer with explanation.
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