# Suppose this worker is currently working 40 hours per week and earning \$8 per hour.

Suppose this worker is currently working 40 hours per week and earning \$8 per hour.

Questions 46 and 47 refer to the following diagram

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Suppose this worker is currently working 40 hours per week and earning \$8 per hour.
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Work

0

40

60

\$320

\$560

Income

B

46. Suppose this worker is currently working 40 hours per week and earning \$8 per hour. Which one of the following would cause a move to point B, and the subsequent increase in work hours to 60? a. The availability of overtime work at \$12 per hour

b. The availability of a moonlighting job that pays \$6 per hour

c. An increase in the straight-time wage to \$9.33 per hour

d. An increase in non-wage income of \$240

47. Suppose this worker’s union negotiates an increase in the straight-time wage from \$8 to \$9.33 per hour with no bonus for overtime. This plan would allow earnings of \$560 at 60 hours per week. Assuming this worker can freely choose the number of hours worked, he will choose to work: a. 60 hours per week

b. fewer than 60 hours per week

c. more than 60 hours per week

d. more than 60 hours per week if the income effect dominates; less otherwise

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