Consider a working mother with one child in New Zealand. Her wage rate is $30 per...

Consider a working mother with one child in New Zealand. Her wage rate is $30 per hour, and the maximum hours she can work is 80 hours per week.

a) Draw her budget line. What is the slope of the budget line?

b) In New Zealand, the Family Tax credit (FTC) gives a working mother with one child $113 if her weekly earnings are between $0 to $820. For each additional dollar earned above $820, the tax credit decreases by 25 cents. Draw the budget line under the FTC. What are the slopes of the new budget line?

c) Where does the new budget line intersects with the initial budget line in (a)? What are her income and hours of work at the intersection?

d) Suppose the working mother works 25 hours per week under the original budget constraint in (a). What is the income effect from the FTC? What is the substitution effect from the FTC? Will she work more, less, or ambiguous after the introduction of the FTC?

Expert Solution

Rahul Sunny answered 7 months ago

1. Consider a working mother with one child in New Zealand. Her wage rate is $30...

1. Consider a working mother with one child in New Zealand. Her wage rate is $30 per hour, and the maximum hours she can work is 80 hours per week. a) Draw her budget line. What is the slope of the budget line? b) In New Zealand, the Family Tax credit (FTC) gives a working mother with one child $113 if her weekly earnings are between $0 to $820. For each additional dollar earned above $820, the tax credit decreases...

A 10-year-old child is brought into the emergency department by her mother. The mother appears anxious...

A 10-year-old child is brought into the emergency department by her mother. The mother appears anxious but sits quietly next to her daughter in the waiting room. When called into the triage area, the mother gives a history of coming home from work to find her daughter sitting on the couch watching television. Her daughter did not go to the door to greet her or look toward her when she said hello. The mother thought the daughter’s behavior was odd...

Rose is a single mother (whose child lives with her all year round and is her...

Rose is a single mother (whose child lives with her all year round and is her dependent). She files her tax return as Head of Household. Her 2020 income from wages is $475,650. She has “net long-term capital gains” of $85,000. Total 2020 gross income is $560,650. Rose is under 65 years of age and does not itemize her deductions. What is Rose's total federal income tax? Show work. A) $112,829 B) $123,344. C) $138,644 D) $149,701

A young mother of a 4 year old child expresses concern regarding the milk her child...

A young mother of a 4 year old child expresses concern regarding the milk her child is drinking. The family purchases milk with WIC (Women Infant Children) government assistance. “I am not allowed to purchase organic milk” she states. The mother goes on to explain “I heard regular cow’s milk has hormones in it and I am worried about giving it to my child.” How would you respond to this mother? Would it be prudent for her to forgo her...

Negotiate the following situations: A child wants to stay with his or her mother and not...

Negotiate the following situations: A child wants to stay with his or her mother and not come with you to the examining room; An elderly patient refuses to remove clothing for an electrocardiogram; You contact a customer service representative regarding a service or product you paid for but are not satisfied with; You want a raise, but your employer says the company does not have the money; Your employer’s daughter calls and wants to speak to her mother right away....

A New Zealand company produces 20,000 ounces of gold per year. It uses 30% of its...

A New Zealand company produces 20,000 ounces of gold per year. It uses 30% of its production for making gold jewelry sold at a fixed price through stores in Australia and New Zealand, and the rest is sold on the market, where the gold price is determined in US dollars. Australia’s profits are repatriated to New Zealand. The company’s CEO wants to use futures contractc to hedge the entire production. He calls you to seeks your opinion. Recommend a seinsble...

Assume the following information: One-year interest rate in New Zealand 5 percent One-year interest rate in...

Assume the following information: One-year interest rate in New Zealand 5 percent One-year interest rate in U.S 12 percent Spot rate NZ$ $0.60 Forward rate NZ$ $0.54 initial investment of $10,000,000 (US (NZ) dollars for US (NZ) investor Is covered interest rate possible for US investors? New Zealand investors? Explain why covered interest rate arbitrage is or is not feasible.

janet,a mother of two, decides to reduce her working hours to spend more time with her...

janet,a mother of two, decides to reduce her working hours to spend more time with her children. By itself, assumint everything else being the same, this development has necessarily resulted in a lower quality of life for janet due to a fall in income (and resultant fall in economic activity as measured by GDP). True or false, why?

Katie is a 7-month-old baby girl, the second child born to her parents. Her mother had...

Katie is a 7-month-old baby girl, the second child born to her parents. Her mother had a healthy, full-term pregnancy, and Nona’s birth weight was normal. She did not respond well to breastfeeding and was changed entirely to a formula based on cow’s milk at 4 weeks. Between 7 and 12 weeks of age, she was admitted to the hospital twice with a history of screaming after feeding, but was discharged after observation without a specific diagnosis. Elimination of cow’s...

Danielle DiMartino is a 32-year-old single mother with one child. Her 8-year-old daughter has a history...

Danielle DiMartino is a 32-year-old single mother with one child. Her 8-year-old daughter has a history of ear infec- tions that require doctor’s office visits four or five times per year. Danielle’s 70-year-old mother lives with the family for financial reasons; she has hereditary high blood pressure and high cholesterol as well as diabetes. Danielle’s mother is enrolled in Medicare Parts A and B. Danielle’s employer pays all or a portion of the cost for a health care plan to...

Question