In: Economics
Jilai earns $12 per hour for up to 40 hours of work each week. He is paid $18 for every hour in excess of 40. Jilai faces a 20 percent tax rate on his labor earnings. Regardless of how much he works, he also receives $200 in tax-free dividends from prior investments each week. There are 110 non-sleeping hours in the week. graph jilai.
We have the relevant calculations in the table below for the required graph.
Available (non-sleeping) hours not used for work | Hours worked (110 - hours not used for work) | Wage Rate | Total Wages | Tax @20% | Wages after taxes | Dividend income | Total Income | |
110 | 0 | 12 | 0 | $12 * hours worked | - | - | 200.0 | 200.0 |
100 | 10 | 12 | 120 | 24.0 | 96.0 | 200.0 | 296.0 | |
90 | 20 | 12 | 240 | 48.0 | 192.0 | 200.0 | 392.0 | |
80 | 30 | 12 | 360 | 72.0 | 288.0 | 200.0 | 488.0 | |
70 | 40 | 12 | 480 | 96.0 | 384.0 | 200.0 | 584.0 | |
69 | 41 | 18 | 498 | $480 + $18 on hours worked in excess of 40 | 99.6 | 398.4 | 200.0 | 598.4 |
59 | 51 | 18 | 678 | 135.6 | 542.4 | 200.0 | 742.4 | |
49 | 61 | 18 | 858 | 171.6 | 686.4 | 200.0 | 886.4 | |
39 | 71 | 18 | 1038 | 207.6 | 830.4 | 200.0 | 1,030.4 | |
29 | 81 | 18 | 1218 | 243.6 | 974.4 | 200.0 | 1,174.4 | |
19 | 91 | 18 | 1398 | 279.6 | 1,118.4 | 200.0 | 1,318.4 | |
0 | 110 | 18 | 1740 | 348.0 | 1,392.0 | 200.0 | 1,592.0 |
Pls see the graph below. Income (or consumption) is on vertical axis and leisure hours on horizontal axis.