4 - (a) Compare the life-cycle path of hours of work...

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ECON 4616 In-Class Exercises NAME: Prof. Francisca Antman Exercise 4—Labor Supply over the Life Cycle Borjas(3-1) Consider two workers with identical preferences, Phil and Bill. Both workers have the same life cycle wage path in that they face the same wage at every age, and they know what their future wages will be. Leisure and consumption are both normal goods.
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Unformatted text preview: (a) Compare the life-cycle path of hours of work between the two workers if Bill receives a one-time unexpected inheritance at the age of 35. (b) Compare the life cycle path of hours of work between the two workers if Bill had always known he would receive (and, in fact, does) receive a one-time inheritance at the age of 35....
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This note was uploaded on 12/06/2010 for the course ECON 4616 taught by Professor Antman during the Fall '08 term at Colorado.

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