Question

Brian and Edwin both work 40 hours a week. Their wage rate is defined as w. If they wish to work over 40 hours per week, they are able to get a second job whose wage rate is w1 < w (they cannot exceed more than 40 hours per week at their first job).

a. Edwin maximizes his utility when he works 40 hours per week. Graph his budget constraint and indifference map, showing that Edwin does not get the second job.

b. Brian wishes to go to medical school. In turn, Brian decides to get the second job as well. Graph Brian’s budget constraint and indifference map, showing his choice to get a second job.

c. For each of the cases above, analyze what happens to each mans' hours of work when w1 increases. Explain the income and/or substitution effect if it occurs.

d. Show what an increase in unearned income does to hours of work in both Brian and Edwin's cases.no​

Answer 1

Answer:

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nothing

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