Say a worker has a time endowment of 80 hours a week that can be allocated between labour and leisure. The hourly wage is 10 euros an hour. There is no non labour income. (a) Draw the workers budget line (b) Say a UBI scheme of 100 euros a week is introduced. Show how this will affect the budget line. (c) Now say the UBI scheme is financed by a 50% tax rate on all income (excluding the UBI payment). Draw the budget line (d) Now say there is no tax but a welfare payment which can only be claimed by those not working any hours is introduced instead of the UBI. Draw the budget line in this case

Say a worker has a time endowment of 80 hours a week that can be allocated between labour and leisure. The hourly wage is 10 euros an hour. There is no non labour income. (a) Draw the workers budget line (b) Say a UBI scheme of 100 euros a week is introduced. Show how this will affect the budget line. (c) Now say the UBI scheme is financed by a 50% tax rate on all income (excluding the UBI payment). Draw the budget line (d) Now say there is no tax but a welfare payment which can only be claimed by those not working any hours is introduced instead of the UBI. Draw the budget line in this case

Survey of Economics (MindTap Course List)

9th Edition

ISBN:9781305260948

Author:Irvin B. Tucker

Publisher:Irvin B. Tucker

Chapter10: Labor Market And Income Distribution

Section: Chapter Questions

Problem 13SQ

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