ECON 2A03 Lecture Notes - Lecture 5: Indifference Curve, Basic Income, Reservation Wage
22 Sep 2017
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Hours per day, days per week, weeks per year. It may affect the quantity and the quality of labour supply. Distribution of hours worked per week by sex, january 2011. It represents an individual"s choice of hours worked given opportunities and value of non-market time. Individuals choose the feasible outcomes which yield the highest level of satisfaction satisfaction. A person is indifferent between various combinations of consumption and leisure on an indifference curve. Preferences over all conceivable combinations of consumption and leisure. Constraints are determined by the economic properties of the market, which, in turn, transform consumption-leisure to income-leisure by setting the price of consumption. The wage rate at which an individual would be indifferent between participating and not participating in the labour force. It is the slope of the individual"s indifference curve at zero hours of work. A useful wat to characterize the optimum is to compare mrs with the market wage rate.
