Lecture 10 - Lecture 10 Labor Supply Policy Policy Changes...

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Lecture 10 Labor Supply Policy
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Policy Changes Affect our BC in Ways that Affect our Labor Supply Minimum Hours Requirement Welfare Work requirements Overtime You should be able to show the effects graphically. Who works more? Who works less? Etc.
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Minimum hours requirements For most jobs one cannot agree to work for one hour per week. There is often some minimum number of hours per week that one must work if one chooses to work at all. This will affect some persons decision of whether to work at all.
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Someone who works more Leisure Labor Income BC with minimum hours This person chooses To work the minimum. Choice with no restriction on hours worked The person prefers Working the min. to not working at all 16*W 16 0
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Someone who works less Leisure Labor Income BC with minimum hours This person chooses not to work. Choice with no restriction on hours worked The person prefers not working to working the Minimum. 16*W 16 0
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Questions What do the slopes of the indifference curves represent? What kind of person has a steeper indifference curve? Is this person more or less likely to leave the labor market when a minimum hours requirement is introduced?
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Some people will work more due to a minimum hour requirement. People with flatter indifference curves who value money more than leisure. Some people will work less as a result of a minimum hours requirement. People with steeper indifference curves who
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Lecture 10 - Lecture 10 Labor Supply Policy Policy Changes...

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