Question

A) Contrast optimal labor supply to both states of sub-optimal labor supply -- underemployment and overemployment. Which of these two sub-optimal states would YOU consider to be relatively more negative for the household utility level, and why?
B) Contrast the net effect on individuals' desired labor supply if the legal overtime pay premium was only "straight time" (not with a time-and-a-half, 1.5 premium rate) after 40 hours in a week. What if then, a new law, instead, made the overtime premium to be "double-time" rate (for workers covered by this law, mainly hourly-paid employees)?

C) Contrast why some some households would be substituting for “time-intensive” with “goods-intensive” production activities? Briefly, how might this relate back to the historical, underlying motivations of people to work (for pay)? Provide an example of one household production and one household consumption type of activity that you would choose to do if you had one full extra day (24 hours) of time (such as February 29 this year), and why that activity?

Please type it.

Answer 1