Labor Economics: 1) How many hours will a person allocate to leisureactivities i

Question

Labor Economics:

1) How many hours will a person allocate to leisureactivities if her indifference curves between consumption and goodsare concave to the origin?

2) Tom earns $15 per hour for up to 40 hours of workeach week. He is paid $30 per hour for every hour in excess of 40.Tom faces a 20% tax rate and pays $4 per hour in child careexpenses for each hour he works. Tom receives $80 in child supportpayments each week. There are 168 hours in the week. Graph Tom?sweekly budget line.

3) Among single, college-educated women aged 22-25,average annual hours worked is 2,160 and the average wage is$22.50. If the average wage increases to $25 per hour, averageannual hours worked increase to 2,340. What is the elasticity oflabor supply for this group of workers?

Explanation / Answer

I can solve 2( i am actually only allowed to answer one) LaborEconomics:

1) How many hours will a person allocate to leisureactivities if her indifference curves between consumption and goodsare concave to the origin?

Depends, concave up or down? This question seems too vague toanswer



2) Tom earns $15 per hour for up to 40 hours of workeach week. He is paid $30 per hour for every hour in excess of 40.Tom faces a 20% tax rate and pays $4 per hour in child careexpenses for each hour he works. Tom receives $80 in child supportpayments each week. There are 168 hours in the week. Graph Tom?sweekly budget line.

This question seems to be very free without much restraint, so Iwill give you my opinion
Tom's Revenue/Income:

Regular Pay: $15*40= $600

Let's say he sleeps 8 hours/day=56hours/week
and he needs 1hour/meal so 3 meals a day which equals to21hours/week
and he needs to spend time with his child (optional) and commutehome and other related stuff let's say 3 hours a day for21hours

so the rest time he can work would be: 168-40-56-21-21=30hours
Excess pay: $30*(30)=$900
Child Support: $80
So total revenue= $1580

Expense:

He worked for a total of 70 hours, so:

Child care= $4*70=$280

You can graph use these information

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