Frankie and Johnny can both earn a wage rate of $10 per hour and,coincidentally,both have $100 per week in non-labor income.Assume that both have T = 100 hours per week to allocate to leisure and work.Frankie chooses to work 40 hours per week.Johnny,on the other hand,chooses not to work at all! Use indifference curve analysis to account for why two individuals confronting the same wage rate and with the same amount of non-labor income make such different labor supply choices.

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The Answer of Frankie and Johnny can both earn a wage rate of $10 per hour and,coincidentally,both have $100 per week in non-labor income.Assume that both have T = 100 hours per week to allocate to leisure and work.Frankie chooses to work 40 hours per week.Johnny,on the other hand,chooses not to work at all! Use indifference curve analysis to account for why two individuals confronting the same wage rate and with the same amount of non-labor income make such different labor supply choices.

Frankie and Johnny Can Both Earn a Wage Rate of $10