Dr J Has 80 Hours Per Week to Divide Between

question 26

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 $250 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 10%.

• A) The slope of Dr. J's budget line is everywhere -4.50.
• B) Dr. J's budget line has a kink where his income is $300 and his leisure is 70 hours.
• C) Dr. J's budget line has no kinks in the part of it that corresponds to a positive labor supply.
• D) Dr. J's budget line has a kink in it at the point where he takes 80 units of leisure.
• E) Dr. J's budget line has a piece that is a horizontal straight line.

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Definitions:

Constructed

Something that has been built or formed by combining or assembling different parts or elements.

Complex Problems

Issues or challenges that are multidimensional and difficult to solve because they involve intricate interdependencies and variables.

Alternative Options

Different choices or courses of action available as substitutes for the original plan or decision.

Evaluate Solutions

The process of assessing the effectiveness, feasibility, and potential impact of proposed solutions to a problem.