Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

problem 1: Consider an individual facing a wage rate w. There is a total of 100 hrs available for work or leisure in a week.

a) Represent his budget constraint graphically.
b) Represent the effect of a reduction in the wage rate.
c) Represent the effect of a proportional tax on the labor income.
d) Assume that the individual should pay a 10$ per week in taxes, regardless of how much he works. How does this influence his budget constraint?

problem 2: Assume that the wage rate is w = 1. An agent is working 6 hrs per day and consumes 5 units of goods per day. Assume that the agent claims to be indifferent between his current situation and working one more hour in exchange for two additional units of consumption. Is this agent maximizing is utility? Why? Should he be working more hours? Or fewer?

problem 3: Draw an indifference curve for the consumption and hours of work.

problem 4: Assume, as in the federal income tax code for the United States, that the representative consumer faces a wage income tax with a standard deduction. That is the representative consumer pays no tax on wage income for the first x units of real wage income, and then pays a proportional tax t on each unit of real wage income greater than x.

Thus, the consumer’s budget constraint is given by c = w(h - 1 + (Pie) if w(h - 1) ≤ x, or c = (1-t) w(h-1) + tx +(pie) if w(h-1) ≥ x. Now, assume that the government decreases the tax deduction x. By using diagrams, find out the effects of this tax change on the consumer and elucidate your results in terms of income and substitution effects. Make sure that you consider two cases. In the first case the consumer doesn’t pay any tax before is x reduced, and in the second case the consumer pays a positive tax before x is reduced.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91767

Have any Question? 


Related Questions in Microeconomics

Assignmentresearch a company of your choosing that has

Assignment Research a company of your choosing that has global presence. The World's Most Reputable Companies website has a list of 100 multinational businesses with global presence. Feel free to pick a company from this ...

Assignment maximizing profits and minimizing lossesconsider

Assignment: Maximizing Profits and Minimizing Losses Consider a supplier of agricultural equipment who is deciding how much of two products should be produced by his firm. You determine what the two products are. Now cre ...

Assignmentchoose one of the readings from chapters 14 15 or

Assignment Choose one of the readings from chapters 14, 15, or 16 and summarize, explain, and evaluate the main points of the reading in a minimum of 3 paragraphs. Do not simply cut and paste from the reading, but summar ...

Assignment land restoration proposalpart 1please see

Assignment: Land Restoration Proposal Part 1 Please see attachment for part 1 and only complete highlighted section for this assignment. Your team has been given the land rights to a 100-acre abandoned parcel of land. Th ...

Assignment 1 -i watch the videos on demand and supplythere

Assignment 1 - I) Watch the videos on Demand and Supply There are 5 changes in Demand that shift the demand curve to the right or left.  They are Change in Tastes and Preferences Change in Income Change in Population Cha ...

Leasing equipmentfor catherine owens onlybullsuggest one

Leasing Equipment For Catherine Owens Only • Suggest one key economic factor that motivates leasing as an option in acquiring an asset. Explain the potential asymmetries that may exist where leasing may be beneficial to ...

Great depression economy paperwritten assignmentplease

Great depression , economy paper Written Assignment Please provide a comprehensive answer to the following two questions: 1) Which were the main causes of the Great Depression? 2) Why did the Great Depression last so lon ...

Microeconomics assignmentdiscussion forumnote the video has

Microeconomics Assignment DISCUSSION Forum Note: The video has Closed Captioning. To activate it, start the video, mouse over the bottom of the video and click on the CC icon, then select from the menu. This week's discu ...

Fiscal policy modulewhich has a larger effect on aggregate

Fiscal Policy Module Which has a larger effect on aggregate demand: an increase in government expenditure or an equal-sized decrease in taxes? Explain your answer. To eliminate a recessionary gap, which fiscal policy sho ...

Assignmentinstructions the topic of the research paper will

Assignment Instructions: The topic of the research paper will be any disease or condition of the body. The paper must include a thorough description of the disease/condition; current statistics of those affected - epidem ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro