Dr.J has 80 hours per week to divide between work and leisure.His wage rate if $5 per hour.Dr.J receives a lump sum payment of $250 per week.Suppose that the first $150 per week of his labor income is untaxed, but all labor income above $150 is taxed at a rate of 70%.
A)Dr.J's budget line has a kink where his income is $400 and his leisure is 50 hours.
B)The slope of Dr.J's budget line is everywhere -1.50.
C)Dr.J's budget line has a kink in it at the point where he takes 60 units of leisure.
D)Dr.J's budget line has no kinks in the part of it that corresponds to a positive labor supply.
E)Dr.J's budget line has a piece that is a horizontal straight line.

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The Answer of Dr.J has 80 hours per week to divide between work and leisure.His wage rate if $5 per hour.Dr.J receives a lump sum payment of $250 per week.Suppose that the first $150 per week of his labor income is untaxed, but all labor income above $150 is taxed at a rate of 70%.
A)Dr.J's budget line has a kink where his income is $400 and his leisure is 50 hours.
B)The slope of Dr.J's budget line is everywhere -1.50.
C)Dr.J's budget line has a kink in it at the point where he takes 60 units of leisure.
D)Dr.J's budget line has no kinks in the part of it that corresponds to a positive labor supply.
E)Dr.J's budget line has a piece that is a horizontal straight line.

DrJ Has 80 Hours Per Week to Divide Between Work