Microeconomics
21st Edition
ISBN: 9781259915727
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 23, Problem 9DQ
Sub Part (a):
To determine
Impact of equal income distribution.
Sub Part (b):
To determine
Impact of equal income distribution on poverty.
Sub Part (c):
To determine
Whether the traditional point of view of redistribution is valid or not.
Sub Part (d):
To determine
Conservative point of view.
Sub Part (e):
To determine
Impact of Capitalism and Democracy on society.
Sub part (f):
To determine
Trade off of the equal income distribution.
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Suppose a two-person household. Person 1 has h1 units of time available and takes l1 units of leisure time, and person 2 has h2 units of time available and takes l2 units of leisure time. Collectively, the two persons in the household care about their total consumption c, and their total leisure l=l1+l2, and they have preferences over their total consumption and total leisure just as specified in the course. But person 1 faces a market wage w1, and person 2 faces a market wage w2, with w1 > w2.
1) Draw the budget constraint faced by the two-person household. What will the household do, that is, how much does each household member work?
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2. Alexandria and Bob can each choose to Work or Not Work on a task. Each person's output is £80
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