Dr J Has 80 Hours Per Week to Divide Between

question 13

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 $100 per week. Suppose that the first $50 per week of his labor income is untaxed, but all labor income above $50 is taxed at a rate of 70%.

• A) Dr. J's budget line has a kink in it at the point where he takes 80 units of leisure.
• B) Dr. J's budget line has a kink where his income is $150 and his leisure is 70 hours.
• C) The slope of Dr. J's budget line is everywhere -1.50.
• D) Dr. J's budget line has no kinks in the part of it that corresponds to a positive labor supply.
• E) Dr. J's budget line has a piece that is a horizontal straight line.

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Definitions:

Unkempt

Refers to an appearance or condition that is messy, disorderly, or not properly maintained.

Entitled to Payment

Refers to having a legal right or claim to receive a specified amount of money for goods provided, services rendered, or as compensation.

Carlill v. Carbolic Smoke Ball Co.

A landmark 1892 English court case that established important principles in contract law, particularly in regard to unilateral contracts.

Marketing Practice

The methods and tactics businesses use to promote and sell their products or services.