Answer to Question #300011 in Microeconomics for Pohu

Question

Consider a couple’s decision about how many children to have. Assume that over

a lifetime couple has 20,000 hours of time to either work or raise children. The

wage is $10 per hour. Raising a child takes 20,000 hour time.

(a) Draw the budget constraint showing the trade- off between lifetime

consumption and number of children. (Ignore the fact that children come only

in whole numbers.) Show indifference curves and optimum choice.

(b) Suppose the wages increases to $12 per hour. Show the budget constraint shifts.

Can you please explain me when wages will increase then what to do...

Answer 1

200 000=10y+20 000x

200 000=12y+20 000x

With an increase in wages, you can hire a teacher or go to a development center