Would any of the following affect Maria\'s best response curve or the firm\'s is

Question

Would any of the following affect Maria's best response curve or the firm's isocost lines for effort in Figure 6.6? If so, explain how 1. The government decides to increase childcare subsidies for working parents but not for those unemployed. Assume Maria has a child and is eligible for the subsid,y 2. Demand for the firm's output rises as celebrities endorse the good 3. Improved technology makes Maria's job easier Lower cost of effort (but infeasible) Minimum feasible cost Worker's best response curve 0.75, Higher cost of effort 0.5 MRS = MRT 10 12 Reservation wage Hourly wage, w (S)

Explanation / Answer

1 will affect since it raises cost of labour. Worker would like to work more

3 will affect since effort needed is now less to gain same income or wage

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