Tomoko Receives a Lump Sum Child Support Payment of $200

question 65

Multiple Choice

Tomoko receives a lump sum child support payment of $200 per week.She has 80 hours a week to divide between labor and leisure.She earns $5 an hour.The first $100 per week of her labor income is untaxed, but all labor income that she earns above $100 is taxed at the rate 50%.If we graph her budget line with leisure on the horizontal axis and consumption on the vertical axis, her budget line has

• A)no kinks in the part that corresponds to positive labor supply.
• B)a kink in it where her income is $300 and her leisure is 60 units.
• C)a kink in it at the point where she takes 70 units of leisure.
• D)a slope of -2.50 everywhere.
• E)a piece that is a horizontal straight line.

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Definitions:

Partnership

A legal arrangement where two or more parties agree to do business together and share profits and losses.

Joint Interest

A legal or financial interest shared between two or more parties in a particular asset, operation, or venture, often involving shared responsibilities and benefits.

Campground

A place designed for camping, where individuals can set up tents, camper trailers, or other temporary lodging facilities, often equipped with amenities like restrooms and picnic areas.

Ordinary Course

Actions that are considered normal or customary within the daily operations of a business or individual's affairs.