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28 Sep 2019
Using the neoclassical model of labor-leisure choice to answer the following questions.
a. How does an increase in wage rate change the optimal consumption-leisure combination chosen by the worker? State income effect and the substitution effect.
b. Suppose the government grants $1000 to women who are completely out of the labor force. If this eligible woman gets a job in the labor market, the government takes away 50 cents from the cash grant for every dollar earned by the woman. The wage rate in the labor market is $10 per hour. How does this welfare program create work disincentives for women?
Using the neoclassical model of labor-leisure choice to answer the following questions.
a. How does an increase in wage rate change the optimal consumption-leisure combination chosen by the worker? State income effect and the substitution effect.
b. Suppose the government grants $1000 to women who are completely out of the labor force. If this eligible woman gets a job in the labor market, the government takes away 50 cents from the cash grant for every dollar earned by the woman. The wage rate in the labor market is $10 per hour. How does this welfare program create work disincentives for women?
Yusra AneesLv10
28 Sep 2019
