Goods

Figure 7-1: Labor – leisure trade-off

(C)
 
(Price of goods = 1)

24w

Slope of budget constraint: -w

BC

24
Leisure (N)
Work (H=24-N)
Goods Figure 7-2: Income and substitution effects for labor supply
24w2

C
C3

24w1 B
C2

A
C1
BC2

BC* BC1
N2 N3 N1 24
Substitution effect Leisure
Work
Income
effect
Goods
Figure 7-3: Income and substitution effects for labor supply
24w2 (income effect dominates)

C3 C

24w1 B
C2

A
C1
BC2

BC* BC1
N2 N3 N1 24
Substitution effect Leisure
Work
Income effect
 Goods

24w2

Consumer Choice
C2 B Figure 7.4:
Deriving leisure
24w1
demand and labor
supply
A
C1 BC2

BC1
12 16 24 Leisure
(hours)
 
Wage Wage
Demand for Supply of labor
Leisure
B B
w2
w2

A A
w1
w1

12 16
Leisure 8 12
Labor
   
 Figure 7-5: Rice export quotas in Vietnam

Quota

Sv
Price

pw

pv

Dw

Dv
0 Quantity
Qv Qw
 Figure 7-6: Child labor in Vietnam
W
S3 S2

4 S1
W4

3
W3
2
W2

1
W1

D2

D1
0 L4 L1 L3 L2 L