please answer B 6. (See week 5 Autumn Term) Assume you can work as manyhours you wish at £12 per hour (net of tax). If you do not work,you have no income. You have no ability to borrow or lend, soyour consumption, c, is simply equal to your income.a) Derive and plot the feasible set, between daily values ofconsumption c, and "leisure", I. Label the values at the intercepts (thepoints where the feasible frontier cuts the two axes).b) Assume that your optimal choice of consumption and leisure is towork 8 hours per day. Illustrate this choice diagrammatically using thefeasible set and indifference curves.c) Use indifference curves and the feasible set to show why, giventhe properties of the optimal choice in part b), it is not optimal towork, say, 10, or 6 hours per day. (continued on next slide)

6. (See week 5 Autumn Term) Assume you can work as many hours you wish at £12 per hour (net of tax). If you do not work, you have no income. You have no ability to borrow or lend, so your consumption, c, is simply equal to your income.

6. (See week 5 Autumn Term) Assume you can work as many hours you wish at £12 per hour (net of tax). If you do not work, you have no income. You have no ability to borrow or lend, so your consumption, c, is simply equal to your income.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Inflation and Purchasing Power Theory

In economic terms, Inflation refers to the increase in the costs of various commodities which are used in daily lifestyle like food, clothes, transport, etc. over a specific time. It may lead to a fall in the purchasing power of the people and also affects the exchange rate of the currency because of the price increase. As the purchasing power falls the unit of the currency in the economy falls. When the prices of the commodities are decreased, then the purchasing power of the consumers will rise, then it will lead to deflation and changes the currency of the base economy to that of the foreign economy which will lead to change in exchange rates.

Question

please answer B

6. (See week 5 Autumn Term) Assume you can work as many
hours you wish at £12 per hour (net of tax). If you do not work,
you have no income. You have no ability to borrow or lend, so
your consumption, c, is simply equal to your income.
a) Derive and plot the feasible set, between daily values of
consumption c, and "leisure", I. Label the values at the intercepts (the
points where the feasible frontier cuts the two axes).
b) Assume that your optimal choice of consumption and leisure is to
work 8 hours per day. Illustrate this choice diagrammatically using the
feasible set and indifference curves.
c) Use indifference curves and the feasible set to show why, given
the properties of the optimal choice in part b), it is not optimal to
work, say, 10, or 6 hours per day. (continued on next slide)

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