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Whitepunk [10]
2 years ago
12

Anthony currently earns $25 an hour and works 40 hours a week. When his boss offers to pay him $29 per hour, Anthony decides to

accept the offer, but decides to keep working 40 hours. What is the effect of Anthony's decision on the labor supply curve?
Business
1 answer:
timofeeve [1]2 years ago
8 0

Answer:

substitution and income effects will counteract each other totally

Explanation:

A labor supply curve is an economic analysis tool that shows the number or workers that are available to work or that can work at various wage rates.

The labor supply curve can either be bending backwards or sloping downwards or upward curving but it shows the relationship between labour and wage rates.

A labor supply curve can be affected by factors such as population, changes in social behaviour, opportunities in other markets, among other things.

From the above question, it is seen that a change in wage rate for Anthony from $25 to $29 does not affect his work hours positively of negatively. His work hours is the same despite the increase in hourly wage.

The effect of the Anthony sticking to 40 hours of work despite an increase in wage, which could have served as some motivation for him to put in more hours is his labor curve remains same. An increase in wage has done noting to affect the number of hours he works and as such his income vs work rate counters each other.

Cheers.

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The answer is d. payment to hire a security worker to guard the gate to the factory around the clock.

Explanation:

Let re-visit to the concept of Fixed cost before applying to the questions.

Fixed costs are costs which are unchanged given changes in production level.

a. payment to a electric utility is not fixed cost because higher level of production required higher electricity consumption which leads to higher cost of electricity.

b. cost of raw material is not fixed cost because the higher the production level, the higher the raw material required for production.

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d. payment to hire a security worker to guard the gate to the factory around the clock is fixed cost because regardless of the production level, the security worker will work for the same amount of time and receive the same level of payment as his workload is much likely to remain the same.

So, d is the correct choice.

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Explanation:

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Learn more about churning with the help of the given link:

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