Feasible Frontier Segment where Both Ana and Luis Work (Figure 3.22)

A two-person household aims to maximize its total daily income. Person A earns $25 per hour but, due to a special contract, can work a maximum of 6 hours per day. Person B earns$15 per hour and can work up to 8 hours per day. If the household decides to collectively work for a total of 10 hours today, what is the optimal allocation of work hours between them to achieve the highest possible combined income?

Household Income Maximization Strategy

Consider a two-person household where one individual earns a higher hourly wage than the other, and the higher-paid individual has a daily limit on the number of hours they can work. If the household is optimizing its total income, a decision for the lower-paid individual to work for any amount of time implies that the higher-paid individual is already working their maximum allowed hours.

Optimal Labor Allocation Strategy

Evaluating a Household Work Allocation Strategy

A two-person household aims to maximize its total daily income. Person 1 earns a higher hourly wage than Person 2, but Person 1 can only work a limited number of hours per day. Person 2 has no such limit. Arrange the following stages in the logical sequence the household would follow as it increases its total work hours from zero to maximize income.

A two-person household needs to earn exactly $180 for the day. Person X earns$30 per hour but can only work a maximum of 4 hours. Person Y earns $20 per hour and can work up to 8 hours. They propose a plan where Person X works 2 hours and Person Y works 6 hours, which correctly totals$180 ($30*2 +$20*6 = $60 +$120 = $180). Which of the following statements best analyzes the efficiency of this plan?

A two-person household wants to maximize its combined income. Person 1 earns a higher hourly wage than Person 2. However, a workplace rule limits Person 1 to a maximum of 8 hours of paid work per day, while Person 2 has no such limit. Analyze the following work allocation scenarios and match each one to the description that best evaluates its economic efficiency.

Evaluating a Household's Work-Life Strategy

Deducing Labor Allocation