Fall 1997 Prof. Polachek / Robst

QUIZ #1A - Sept. 16, 1997
 

Name _____________________
 

Soc. Sec. Number___________________________
 

1. Assume the following indifference curves for Fred.

a. What wage would induce Fred to work? Justify. (5)
 
 
 
 
 
 
 
 
 
 
 

b. Draw the wage constraint if Fred received $10 per hour. How many hours would Fred work (justify)? (10)
 
 
 
 
 
 
 
 
 
 
 

c. Draw the wage constraint if Fred earns time-and-a-half ($15 per hour) for overtime work (over 8 hours). How many total hours does he work (justify)? (10)
 
 
 
 
 
 
 
 
 
 
 
 
 

2. Assume the following labor supply curves for men and women:
 

Males: H = 5 + .7W - 1.2I

Females: H = 2 + 1.0W + .5I
 

a. Is leisure a normal good for men? Women? Justify. (5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

b. Is the labor supply curve is backward bending for men? Women? (Justify) (5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

3. Assume the following indifference curves.
 

Illustrate (on the graph above) the income and substitution effects that would arise from a wage increase from $1 to $2 per hour. (5)
 
 
 
 
 

4. Assume the following indifference curves.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

What effect would increased commuting time (from 0 hours to 2 hours each day) have on hours of work assuming the above indifference curves? Assume the individual earns $3 per hour). (5)