Dr J Has 80 Hours Per Week to Divide Between

question 19

Multiple Choice

Dr. J has 80 hours per week to divide between work and leisure. His wage rate if $5 per hour. Dr. J receives a lump sum payment of $150 per week. Suppose that the first $100 per week of his labor income is untaxed, but all labor income above $100 is taxed at a rate of 70%.

• A) Dr. J's budget line has no kinks in the part of it that corresponds to a positive labor supply.
• B) The slope of Dr. J's budget line is everywhere -1.50.
• C) Dr. J's budget line has a kink in it at the point where he takes 70 units of leisure.
• D) Dr. J's budget line has a kink where his income is $250 and his leisure is 60 hours.
• E) Dr. J's budget line has a piece that is a horizontal straight line.

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Definitions:

Conscious Mind

The aspect of the mind that is aware of one's self, environment, and thoughts, accessible to introspection and reflection.

Situational Variables

External factors that can influence the outcome of experiments and the behavior of individuals in specific contexts.

Self-regulatory Systems

The mechanisms and processes by which individuals control and direct their thoughts, feelings, and actions in pursuit of their goals.

Rewards and Punishments

Behavioral tools used to reinforce desirable behaviors and discourage undesirable ones.