3. George Johnson earns $5 per hour in his job as a truffle sniffer..docx - 3 George Johnson earns $5 per hour in his job as a truffle sniffer After

3. George Johnson earns $5 per hour in his job as a truffle sniffer..docx

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3. George Johnson earns $5 per hour in his job as a truffle sniffer. After allowing time for all of the activities necessary for bodily upkeep, George has 80 hours per week to allocate between Recreation and Labor. *DERIVE THE CONSUMPTION/LEISURE BUDGET LINES AND SHOW THEM FOR THE FOLLOWING(MATHEMATICALLY, NOT GRAPHICALLY): a. There is no government subsidy or taxation of labor income. b. All individuals receive a lump-sum payment of $100 per week from the government. c. If an individual is not working, he receives a payment of
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Unformatted text preview: $100. If he works he does There is no tax on the first $100 per week of labor income. But all labor income above $100 per week is subject to a 50% income tax. not receive the $100, and all wages are subject to a 50% income tax. d. Now choose ANY ONE of these budget constraints for George. Give George a well ordered set of preferences and find his optimal hours of Labor, hours of Recreation, and Consumption of other goods....
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  • Fall '17
  • Bob Maxwell

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