Answer to Question #88524 in Microeconomics for Hassan Shabbir

Question

Consider workers at a local café that opens 7 days a week, the café allows its workers to choose how many days per week they work and which days of the week they work. On Saturdays it must pay workers a 25% loading and pay a 35% loading on Sundays (the current penalty rates for such workers in Australia).
Assume that workers do not care which days of the week they work other than the fact the get paid more on Saturdays and Sundays. Such that the first day they work (if they choose to do so) is always Sunday and if they choose to work a second day it is always Saturday, if they which to work a third to seventh day a week it is week-day (Monday to Friday). In addition, assume workers have no other income or employment opportunities.

a. Draw the budget constraint of café workers for consumption. You do not need to label the consumption intercept.

Answer 1

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