Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 14

Steve Slacker is age 25, has an MBA degree, but is not working. Instead he is living at a major ski area, using the $2,000 per week he gets from his wealthy family. The family, however, seeing that Steve is becoming a permanent slacker, ends this weekly payment. As a result, Steve chooses to take a job that pays $1,000 a week for 40 hours of work. Construct a single income-leisure choice graph to show Steve's situation before and after his parents' decision. Briefly summarize the outcome for hours of work, total weekly income, and Steve's total utility.