Benedict works at a job that pays $5 per hour. He has 12 hours per day to allocate between work and leisure. Besides leisure, he consumes food that costs $1 per unit. Now he is offered a new job that pays $8 per hour; however, the employer of this job can employ Benedict at most 5 hours a day. If Benedict wants to work more than 5 hours a day, he can work 5 hours at the new job and additional hours at his old job at $5 per hour.
a) Graph and carefully label Benedictâs original budget constraint and on the same graph draw his new budget constraint after he is offered the new job.
b) If Benedict was originally working 10 hours per day, how would you predict that the new job offer would change his hours of work? Why?
c) How would your answer to part b) change if Benedict was originally working 3 hours per week?
Benedict works at a job that pays $5 per hour. He has 12 hours per day to allocate between work and leisure. Besides leisure, he consumes food that costs $1 per unit. Now he is offered a new job that pays $8 per hour; however, the employer of this job can employ Benedict at most 5 hours a day. If Benedict wants to work more than 5 hours a day, he can work 5 hours at the new job and additional hours at his old job at $5 per hour.
a) Graph and carefully label Benedictâs original budget constraint and on the same graph draw his new budget constraint after he is offered the new job.
b) If Benedict was originally working 10 hours per day, how would you predict that the new job offer would change his hours of work? Why?
c) How would your answer to part b) change if Benedict was originally working 3 hours per week?
