Suppose that you are currently earning $20 per hour wage rate for the first 8 hours and $35 per...

Question:

Suppose that you are currently earning {eq}\$20 {/eq} per hour wage rate for the first {eq}8 {/eq} hours and {eq}\$35 {/eq} per hour after {eq}8 {/eq} hours of work. You have a new job offer that {eq}\$25 {/eq} per hour flat rate. Assuming you work {eq}12 {/eq} hours per day for both jobs, will you accept the new job? Why? Explain it graphically.

Labor Income:

Labor income is income generated from supplying one's labor to the market. This contrasts with capital income, which is interest earned on capital supplied. Labor income accounts for roughly 2/3 of GDP in the United States.

Answer and Explanation: 1

Become a Study.com member to unlock this answer!

View this answer

You should take the new job if it provides a higher earning. With your new job, your total earnings is:

  • 20 * 8 + 35 *(12 - 8) = 300

With your new...

See full answer below.


Learn more about this topic:

Loading...
Labor Market: Definition & Theory

from

Chapter 3 / Lesson 41
28K

Learn the labor market definition and what happens in the labor market. See what the split labor market theory is and learn the different types of labor market.


Related to this Question

Explore our homework questions and answers library