Asked by Diamondz R-blissful on Jul 28, 2024
Verified
Lucetta changes light bulbs.She is paid $10 an hour.She can work as many hours as she wishes.Lucetta works only 6 hours a day.But she says she loves her job and is happier working at this job than she would be if she made the same income without working at all.Though this may sound strange, Lucetta is perfectly rational.Draw a graph showing leisure on the horizontal axis and income on the vertical axis.Draw a budget line and some indifference curves for Lucetta that are consistent with Lucetta's words and actions.Explain in words what happens.
Leisure
Free time when one is not working or occupied; time that can be spent on relaxation or hobbies.
- Evaluate the considerations of income derived from work versus downtime in deciding the optimal employment duration.
- Understand the graphical depiction of indifference curves along with budget restrictions.
- Acquire an understanding of how income, the use of commodities, and leisure time contribute to the maximization of utility.
Verified Answer
KV
Kevin VelazquezAug 01, 2024
Final Answer :
Work for Lucetta is desirable on average but undesirable at the margin when she is working 6 hours a day.The diagram will work if you draw a U-shaped indifference curve tangent to her budget line at 6 hours.Make sure that this indifference curve intersects the horizontal line through her consumption choice somewhere to the right of her choice but to the left of where she doesn't work at all.
Learning Objectives
- Evaluate the considerations of income derived from work versus downtime in deciding the optimal employment duration.
- Understand the graphical depiction of indifference curves along with budget restrictions.
- Acquire an understanding of how income, the use of commodities, and leisure time contribute to the maximization of utility.