Help with economics

Help with economics

Question
	1. Suppose that current workers’ compensation policy (A) provides
employees injured on the job a payment of $X each year whether they work
 or not. Suppose the government were to implement a new program (B) in
which those who did not work at all got ½ $X per year but those who did
work got ½ $X plus workers’ compensation of 50 cents for every hour
worked. So, in other words, the constraint under policy A is the fixed
payment plus the wage rate [($X) + W], and under policy B it is [.5($X) +
 1.5W].

Graphically depict the wage constraint for (1) no policy, (2) policy A, and (3) policy B.

What impact does policy A have on labor supply compared to no policy at all?

What would be the change in work incentives associated with policy B compared to policy A?

The
 graph associated with this problem should be large and on a separate
sheet of paper. Be sure to calibrate each axis very precisely.

2.
 There is a proposal to increase the federal minimum wage to $10.10. If
16 hours per day are available for work and leisure, graphically
represent the daily wage constraint for a worker who was earning the
minimum wage rate of $7.25 and the new budget constraint after the
increase.

Discuss the theoretical impact of the proposed higher minimum wage on labor supply.

More
 specifically, under the current $7.25/hour minimum wage suppose Joe’s
desired hours of work is 3 hours per day, and for Bill it is 7 hours per
 day. Compare and discuss the relative magnitudes of the substitution
and income effects of the higher minimum wage for workers like Joe
versus workers like Bill.

3. Suppose the U.S. passes a law that
cuts the standard work day from 8 to 7 hours. Suppose that overtime
(hours worked per day beyond the “standard” workday) is paid at 50%
above the normal wage rate (1.5W) under both definitions of the standard
 workday. Answer the following questions related to the work incentives
facing workers:

Graph the old budget constraint (in
leisure/income space), showing the overtime premium after 8 hours of
work per day. Assume a maximum work day of 16 hours as we have been
doing in class, and be precise about where on the constraint overtime
pay kicks in.

On your graph in (a), draw in the new budget constraint that sets the standard day at 7 hours.

Use
 your diagrams in (a) and (b) to analyze the change in work incentives
facing workers as a result of this new law changing the standard work
day. Be sure to consider different segments of the new vs. old
constraints.