Consider Alexei who makes $1,400 per week and just won a 'set for life' lottery ticket which involves a fortnightly paym
Posted: Thu Apr 28, 2022 11:38 am
Consider Alexei who makes $1,400 per week and just won a 'set
for life' lottery ticket which
involves a fortnightly payment of $10,000 for 20 years.
Currently he works 35 hours per week. Now
do the following:
Illustrate the effect of the lottery win on Alexei's budget
constraint using a fully labelled
diagram where i) the horizontal axis represents the hours of
free time per week, and in) the
vertical axis represents Alexei's weekly consumption.
Illustrate on the same diagram Alexei's optimal decisions before
and after the lottery win
along with his indifference curves.
Based on your diagram, discuss whether Alexei will quit his
job.
for life' lottery ticket which
involves a fortnightly payment of $10,000 for 20 years.
Currently he works 35 hours per week. Now
do the following:
Illustrate the effect of the lottery win on Alexei's budget
constraint using a fully labelled
diagram where i) the horizontal axis represents the hours of
free time per week, and in) the
vertical axis represents Alexei's weekly consumption.
Illustrate on the same diagram Alexei's optimal decisions before
and after the lottery win
along with his indifference curves.
Based on your diagram, discuss whether Alexei will quit his
job.