How are their labor supply decisions affected

Assignment Help Business Economics
Reference no: EM131090280

Suppose that individuals view their loss of income from imposing a single marginal tax rate as offset by the benefits of public services purchased with the revenues so that the (representative) individual is just as well off as before. How are their labor supply decisions affected? Decompose the change in hours worked into substitution and (combined) income effects. Use a leisure-goods diagram to conduct your analysis by decomposing the price decrease of leisure due to the imposition of the proportional income tax rate into a substitution effect (SE), an ordinary income effect (OIE) and an endowment income effect (EIE) of the price change.

Reference no: EM131090280

Questions Cloud

What is the role of rock lyrics in suicides among teenagers : "What is the role of rock lyrics in suicides among teenagers?" Do you think that a rock group could be held responsible for a death that occurred after a young person had repeatedly listened to their morbid, suicide-praising lyrics?
What happens to aggregate demand : Suppose that the government decreases spending by $100 billion. What happens to aggregate demand? What is the likely effect on prices and output? Where are the new equilibrium price level and GDP relative to the old levels?
Innovation in glass : The industrial essay is based on a presentation on the topic “Innovation in Glass” by Dr Nick Kirk who is the technical director at GTS, Glass Technology Service Ltd. The essay begins with a brief synopsis of the company,
Contract curve with the conventional contract curve depicted : Suppose that Hannah’s utility function is UH = 4C + 3T and that Jose’s utility function is UJ = 3C + 4T, where C is pounds of coffee per year and T is pounds of tea per year. Suppose there are fixed amounts of 28 pounds of coffee per year and 21 poun..
How are their labor supply decisions affected : Suppose that individuals view their loss of income from imposing a single marginal tax rate as offset by the benefits of public services purchased with the revenues so that the (representative) individual is just as well off as before. How are their ..
About the exchange rate : The exchange rate between China’s Yuan and India’s Rupee yesterday was 10.79 Rupee per Yuan. If the exchange rate today is 11 Rupee per Yuan, Which currency appreciated in value? Why or Why not?
Regard to the protection of civil rights and civil liberties : Discuss one example of how the federal government intervened in the state of Texas with regard to the protection of civil rights and civil liberties. Please be specific and give details of how the Federal Government stepped in to protect the rights o..
Why is this cartoon an appeal to fear : Why is this cartoon an appeal to fear? Who is the person in the tent? What is the fear that the cartoon plays upon? Are there other fallacies that we've studied that you think might be at work in this cartoon? "If cartoons can contain fallacies, then..
How the firm might use these for strategic advantage : What market structure best describes the structure under which your organization operates? Identify one challenge and one opportunity that arise from this and how the firm might use these for strategic advantage.

Reviews

Write a Review

 

Business Economics Questions & Answers

  Q1 you have been contracted by an economic consulting firm

q1. you have been contracted by an economic consulting firm to determine the economic structure and possible future

  Concave utility function

Hugo has a concave utility function of U(W) = W^0.5. His only asset is shares in an Internet start-up company. Tomorrow he will learn the stock's value. He believes that it is worth $144 with probability 2/3 and $225 with probability 1/3. illustrate ..

  A competitive firms cost of production

A competitive firm’s cost of production is C(Q) = Q^3-20Q^2+125Q. The firm’s problem is to choose the value of Q> or = 0 that maximizes its profit.

  Government provides substantial benefits to the unemployed

Fill in the blanks with the following words: size, discourage, supply, opportunity cost, duration, encourage, demand. If a government provides substantial benefits to the unemployed while they look for work, it reduces the _______ of being unemployed..

  Due to uncertainty in the interest rate value

Suppose the amount 207 is paid at the end of each of several equal periods and 0.059 is the interest rate per period, then at the end of these periods, the total amount paid is 951. Find the number of periods; due to uncertainty in the interest rate ..

  Labor costs have been increasing at an annual rate

Labor costs have been increasing at an annual rate of 10%. A firm wishes to set aside funds to cover labor costs for the next 5 years. Determine how much must be set aside today if the money will be invested and will earn interest at a rate of 10%. T..

  Identify the four major tools of monetary policy

Identify the four major tools of monetary policy. How can monetary policy address the problem of inflation?

  Economy has overbuilt and suffers from excess capacity

Suppose an economy has overbuilt and suffers from excess capacity. A recession ensues due to firms cutting back on expenditures. Is deficient demand more easily remedied by monetary or fiscal policy? Explain

  Equation for the firms short run supply schedule

The Short Run total cost curve of a firm in a hypothetical market is given by.  What is the shut down price? What is the break-even point of the firm? What is the equation for the firm’s short run supply schedule?

  What premium he pay and what will be his expected utility

Suppose he is offered fair insurance with a $3000 deductible. What premium will he pay and what will be his expected utility with insurance.

  Illustrate what are the no-trade monopoly equilibrium price

Illustrate what are the no-trade monopoly equilibrium price and quantity of apples produced at home now.

  Determine the estimated regression line

Consider the Sherwin Williams Company example discussed in this chapter. Suppose one is interested in developing a simple regression model with paint sales (Y) as the dependent variable and selling price (P) as the independent variable.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd