Question
In: Economics
Assume that an individual wins a lottery. Assume also that the individual was working before the lottery win and had no other nonlabor income before the lottery win.
Assume that an individual wins a lottery. Assume also that the individual was working before the lottery win and had no other nonlabor income before the lottery win.
a) Using the basic static model of individual labour supply, discuss both graphically and explain in your own words how the lottery win will affect the individual’s level of hours worked. Discuss all relevant effects.
b) Is it possible that the individual decides to stop working following the lottery win? In your answer discuss the concept of reservation wages and add the individual’s reservation wage before and after the lottery win to your graph.
Solutions
Rahul Sunny answered 1 year agoRelated Solutions
Assume that an individual wins a lottery. Assume also that the individual was working before the lottery win and had no other nonlabor income before the lottery win.
Assume that an individual wins a lottery. Assume also that the individual was working before the lottery win and had no other nonlabor income before the lottery win.
a) Using the basic static model of individual labour supply, discuss both graphically and explain in your own words how the lottery win will affect the individual’s level of hours worked. Discuss all relevant effects.
b) Is it possible that the individual decides to stop working following the lottery win? In...
Assume that an individual wins a lottery. Assume also that the individual was working before the lottery win and had no other nonlabor income before the lottery win.
Assume that an individual wins a lottery. Assume also that the individual was working before the lottery win and had no other nonlabor income before the lottery win.
a) Using the basic static model of individual labour supply, discuss both graphically and explain in your own words how the lottery win will affect the individual’s level of hours worked. Discuss all relevant effects.
b) Is it possible that the individual decides to stop working following the lottery win? In your...
2. a. Graph a budget constraint for an individual with 280 hours a week, nonlabor income...
2. a. Graph a budget constraint for an individual with 280 hours
a week, nonlabor income of $120 per week, and a wage of $10 per
hour.
Show this person's indifference curve such that he is working 50
hours a week. Label his leisure, labor, and income.
b. suppose this individual decides to work 60 hours a week once
his wage increases to $12 per hour. Which portion of his labor
supply curve is he on (Is the substitution effect...
The following table shows the number of wins eight teams had during a football season. Also...
The following table shows the number of wins eight teams had
during a football season. Also shown are the average points each
team scored per game during the season. Construct a 90% prediction
interval to estimate the number of wins for teams that scored an
average of 27 points a game.
Points_per_Game
Wins
25.3
12
18.7
6
20.6
5
24.6
9
12.5
2
22.4
7
22.7
12
23.7
9
The following table shows the number of wins eight teams had during a football season. Also...
The following table shows the number of wins eight teams had
during a football season. Also shown are the average points each
team scored per game during the season. Construct a 90% prediction
interval to estimate the number of wins for teams that scored an
average of 27 points a game
Wins
13
7
3
9
3
7
11
8
Points per Game
25.5
18.5
20.3
24.5
12.2
22.5
22.9
23.6
Determine the upper and lower limits of the prediction...
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katie had a before-tax income of $40,000 and paid taxes of
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$5,250. Based on this information, the tax system is .....
a.regressive for all income levels below $40,000
b. proportional
c. progressive
d. based on the benefits-received principle
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Assume you have a dataset available that includes information on who is playing in a lottery, who wins a lottery and information on how much these individuals work over several time periods
Assume you have a dataset available that includes information on who is playing in a lottery, who wins a lottery and information on how much these individuals work over several time periods (both before and after the lottery).
a) How would you test whether winning the lottery affects labour supply and hence whether the predictions made , hold in the real world? Describe the method you would use and how you would use it.
b) Would you use the full...
The multistate Powerball Lottery, worth $182 million, was won by a single individual who had purchased...
The multistate Powerball Lottery, worth $182 million, was won by
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winner was given two choices: Receive 26 payments of $7 million
each, with the first payment to occur now and the rest to be sent
at the end of each of the next 25 years; OR receive a single
lump-sum payment today that would be equivalent to the 26 payments
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Assume that an individual has the following relationship between income and utility.
Q1) Assume that an individual has the following relationship
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accident occurs and she has to pay 40,000. With probability 0,5 the
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§Investor A, a single individual, has $200,000 of taxable income in 2014, 2015 and 2016 before...
§Investor A, a single individual, has $200,000 of taxable income
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has an end of year loss in 2014 and 2015 of ($50,000) per year and
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a) Pass-through entity?
b) C Corporation?
§Assume 35% tax rate for pass through entity.
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