| Question | Originally when he could work as many hours as he wanted at a wage w, Roy chose to work seven hours a day. The employer now offers him w for the first eight hours in a day and an over-time wage of 1.5w for every hour he works beyond a minimum of eight hours. Show how his budget constraint changes. Will he necessarily choose to work more than seven hours a day? Would your answer be different if he originally chose to work eight hours? |
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| Subject | business-economics |
