2 people A and B earn the same wage rate and the same preferences, but B...

Question

Question

2 people A and B earn the same wage rate and the same preferences, but B has higher non-labor income than A. If you notice th Dans preferences over consumption and leisure are captured by uſc, l) = Ac>10.5. If the wage rate changes by $1 what is the

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Due to presence of Chegg policy, I am answering one question.

1.

Ans:

o B inferior

Reason: Higher income is causing higher work hours i.e. there is negative relation between income and leisure.

If you are satisfied with the answer, please provide a positive rating. Feel free to comment in case of queries.

Have a nice day ahead!

Add a comment

Answer 2

Similar Homework Help Questions

Problem 2 A consumer has the following preferences regarding consumption and leisure time: ?(?, ?) =...

Problem 2 A consumer has the following preferences regarding consumption and leisure time: ?(?, ?) = ? ∙ (24 − ?) Where ? is the quantity of an aggregated consumption good and ? are the supplied labour hours (working in a job) per day, and consequently, 24 − ? is the leisure time ?. The budget available for daily consumption is the sum of labour income and other fixed (daily) income with ? = price of the aggregated consumption good...
A worker receives a wage rate w and has L hours of leisure every day (the...

A worker receives a wage rate w and has L hours of leisure every day (the total endowment of hours is 24 hours per day). The government taxes his income at the constant rate T. The worker spends all his income. 1. Write a budget constraint of this individual and plot it. 2. Display graphically what is the optimal consumption-leisure choice for this worker. 3. Imagine that the government increases the tax rate to T 0 . What is the...
1. The reservation wage likely increases when A. the price of consumption increases. B. the wage...

1. The reservation wage likely increases when A. the price of consumption increases. B. the wage increases. C. the price level (of consumption and wages) increases. D. non-labor income increases. E. one is a discouraged worker. 2. Due to the added worker effect, the labor force participation rate A. increases during a recession. B. decreases during a recession. C. a fairly useless statistic. D. over-counts the number of workers wanting a job. E. over-counts the number of workers with a...

Problem 3 Alan's utility function for consumption (C) and leisure time (1) is U(C,1) = 2C1/2...

Problem 3 Alan's utility function for consumption (C) and leisure time (1) is U(C,1) = 2C1/2 + 1. Each week, Alan has a time endowment of 120 hours that he can devote to work (N) or leisure time (7). The unit price of C is $1 while the unit wage rate is w. Alan also earns A dollars per week of non-labor income. a) Write the expression of Alan's budget constraint. b) Find Alan's optimal combination of consumption and leisure...
Problem 3 Alan's utility function for consumption (C) and leisure time (1) is U(C,1) = 2C1/2...

Problem 3 Alan's utility function for consumption (C) and leisure time (1) is U(C,1) = 2C1/2 + 1. Each week, Alan has a time endowment of 120 hours that he can devote to work (N) or leisure time (7). The unit price of C is $1 while the unit wage rate is w. Alan also earns A dollars per week of non-labor income. a) Write the expression of Alan's budget constraint. b) Find Alan's optimal combination of consumption and leisure...
Consider a representative consumer who has preferences over an aggregate consumption good c and leisure l....

Consider a representative consumer who has preferences over an aggregate consumption good c and leisure l. Her preferences are described by the utility function: U(c,l) = ln(c) + ln(l) The consumer has a time endowment of h hours which can be used to work at the market or enjoyed as leisure. The real wage rate is w per hour. The worker pays a proportional wage tax of rate t, so the worker’s after-tax wage is (1−t)w. The consumer also has...

3. Consider a representative consumer who has preferences over an aggregate consumption good e and leisure....

3. Consider a representative consumer who has preferences over an aggregate consumption good e and leisure. Her preferences are described by the uility function: U(c,l) In(e) +In(l) The consumer has a time endowment of h hours which can be used to work at the market or enjoyed as leisure. The real wage rate is w per hour. The worker pays a proportional wage tax of rate t, so the worker's after-tax wage is (1 t). The consumer also has dividend...
trate how this works. 8. Suppose that a consumer can earn a higher wage rate for...

trate how this works. 8. Suppose that a consumer can earn a higher wage rate for working "overtime. That is, for the first q hours the consumer works, he or she receives a real wage rate of w, and for hours worked more than q he or she receives w2, where w,>w Suppose that the consumer pays no taxes and receives no nonwage income, and he or she is free to choose hours of work a. Draw the consumer's budget...
A worker has preferences given by the utility function 𝑈(𝑁,𝑌)=𝑁"𝑌 where 𝑁 is the hours of leisure per day and Y is their spending on purchased goods. 13. If the consumer faces a wage rate of w=30, how much leisure and purchased goods do they consume?

A worker has preferences given by the utility function 𝑈(𝑁,𝑌)=𝑁"𝑌 where 𝑁 is the hours of leisure per day and Y is their spending on purchased goods. 13. If the consumer faces a wage rate of w=30, how much leisure and purchased goods do they consume? What is the quantity of labor supplied? 14. Suppose the wage increases to w=40. What is the quantity of labor supplied?

Please provide explanations and graphs as well. Thank you! Please provide explanations and graphs as well....

Please provide explanations and graphs as well. Thank you! Please provide explanations and graphs as well. Thank you! Question 2. Labor supply (3 points) Consider Raymond's preferences for leisure (Z) and other goods (C), U(Z,C)=C+2VZ. The associated marginal utilities are MUC = 1 and MUz = 1. Suppose that Pc = 1 and the wage rate is w. Raymond has no non-labor income and has at most 24 hours to divide between labor and leisure time. 1. Are Raymond's preferences...

2 people A and B earn the same wage rate and the same preferences, but B...

Homework Answers

Add Answer to:
2 people A and B earn the same wage rate and the same preferences, but B...

Post as a guest

Earn Coins

Problem 2 A consumer has the following preferences regarding consumption and leisure time: ?(?, ?) =...

A worker receives a wage rate w and has L hours of leisure every day (the...

1. The reservation wage likely increases when A. the price of consumption increases. B. the wage...

Problem 3 Alan's utility function for consumption (C) and leisure time (1) is U(C,1) = 2C1/2...

Problem 3 Alan's utility function for consumption (C) and leisure time (1) is U(C,1) = 2C1/2...

Consider a representative consumer who has preferences over an aggregate consumption good c and leisure l....

3. Consider a representative consumer who has preferences over an aggregate consumption good e and leisure....

trate how this works. 8. Suppose that a consumer can earn a higher wage rate for...

A worker has preferences given by the utility function 𝑈(𝑁,𝑌)=𝑁"𝑌 where 𝑁 is the hours of leisure per day and Y is their spending on purchased goods. 13. If the consumer faces a wage rate of w=30, how much leisure and purchased goods do they consume?

Please provide explanations and graphs as well. Thank you! Please provide explanations and graphs as well....

2 people A and B earn the same wage rate and the same preferences, but B...

Homework Answers

Add Answer to: 2 people A and B earn the same wage rate and the same preferences, but B...

Post as a guest

Earn Coins

Add Answer to:
2 people A and B earn the same wage rate and the same preferences, but B...