Labor-Leisure Budget Line

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  • Опубліковано 29 жов 2024

КОМЕНТАРІ • 10

  • @curubodzn2700
    @curubodzn2700 11 місяців тому

    Would it be possible to contact you with a specific question regarding leisure constraint? I’ve been given an inequality but can’t seem to evaluate the variables and plot the constraint :/ it regards a progressive tax and how different tax brackets affect the budget line. I can’t link the image of the inequality here sadly

  • @maxbegun3898
    @maxbegun3898 Рік тому

    at 6:31 equation should be c=320-20L

  • @jorgeballester5990
    @jorgeballester5990 3 роки тому

    muy buena explicaciones, felicitaciones.

  • @wasiqr7607
    @wasiqr7607 4 роки тому

    at 5:13 shouldnt the budget constraint equation be: C= 240 -10L

  • @danclarke7553
    @danclarke7553 3 роки тому

    How would overtime and taxes be built into this? Thanks!

    • @EconomicsinManyLessons
      @EconomicsinManyLessons  3 роки тому +2

      With a tax, which flattens the budget line, you should muliple the wage by (1 - tax). Assume 24 hours in day, nonlabor income is zero, wage is $10, and tax rate is 20%.
      C = (1 - 0.2)wage(24 - L) = 8(24 - L).
      Overtime pay will create a kink in the budget line, steepening it. Suppose overtime pay (time and half) kicks in after 8 hours of work. With my last example (but let's ignore taxes), the slope of the budget line will equal from -10 (or -wage) at 0 to 8 hours of work and equal -15 (-wage x 1.5) at 8 to 24 hours of work. There is a kink in the budget line at 8 hours of work or 16 hours of leisure.

    • @danclarke7553
      @danclarke7553 3 роки тому

      @@EconomicsinManyLessons you’re a hero! Thank you 🙏🏼

    • @yutikasingh5443
      @yutikasingh5443 Рік тому

      ​@@EconomicsinManyLessons what will happen in the case of progressive taxation?

  • @curubodzn2700
    @curubodzn2700 11 місяців тому

    Hi