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Unformatted text preview: $37.50 an hour for the average realtor. a. Draw two budget constraints on the same graph for the average realtor working for TREX and the "standard" real estate firm if there are 20 hours in the day to work or leisure and non-labor income is equal to zero. b. There has been much complaining from "standard" real estate firms that TREX has hired all of the "good" realtors. Use your graph in (A) to show that realtors who originally worked more than four hours a day for a standard firm would prefer working for TREX. c. Use the concept of income and substitution effects to explain why realtors work more hours for TREX than for standard firms....
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This note was uploaded on 12/04/2008 for the course ECONOMICS 339 taught by Professor Habermalz during the Winter '07 term at Northwestern.
- Winter '07