2. Consider a woman who earns $10 per hour and who does not have non-labour income (V=0).

a. Assume that there are 168 hours in a week, draw her weekly budget constraint. Label the x-axis, the y-axis, the x-intercept, the y-intercept, the slope and the endowment point.

b. Suppose that this woman has one child, is eligible for welfare, and can receive up to $200/week from the local welfare agency. These benefits, however, are reduced by 50 cents for every dollar she earns. In other words, if E = weekly earnings, welfare benefits = 200-.5E. On the same graph as above, show how the welfare program affects her budget constraint. Be sure to label the slope of her new budget constraint.

c. How many hours a week can this woman work before her weekly welfare benefits are equal to zero?

d. Consider a woman who has a wage of $10 per hour and who, in the absence of a welfare program, works 20 hours per week. Assuming that this woman has one child and is eligible for welfare, what will the effect of the above mentioned welfare program be on the number of hours per week that she chooses to work. On your graph, illustrate the income effect, the substitution effect and the total effect.

e. Give a brief intuitive explanation for why the substitution effect and the income effect work in the same direction.

Please help me from part 3

A company has affiliates in seven countries. Each affiliate enters into transactions with the other affiliates in the course of business. The company has determined that on average a remittance from one affiliate to another costs $30. This cost includes bank fees for international funds transfer, costs in each affiliate to process the payment/receipt, and average cost to exchange currency. (Except for this cost, the information for each question is specific to that question.)

Aggregating payments

1. In one quarter, the US affiliate made 24 purchases from the Japan affiliate and the Japan affiliate made 8 purchases from the US affiliate.

a. What is the total transaction costs of payments if each affiliate pays each invoice separately?

For 24 purchases by US the cost of remittance considering each invoice is paid separately = 24 x 30 = 720

For 8 purchases by Japan the cost of remittance considering each invoice is paid separately = 8 x 30 = 240

Total transaction cost = 720 + 240 = $960 

b. What is the total transaction costs of payments if the US affiliate aggregates all amounts paid to the Japan affiliate and makes a single payment covering the total amount of all 24 invoices and the Japan affiliate aggregates all amounts paid to the US affiliate and makes a single payment covering the total amount of all 8 invoices?

For 24 purchases by US the cost of remittance considering all invoice payments are aggregated into single remittance = $ 30

For 8 purchases by Japan the cost of remittance considering all invoice payments are aggregated into single remittance = 8 x 30 = 240

Total transaction cost = 30 + 240 = 270 

2a. If each of the seven affiliates averages 15 purchases from each of the other affiliates during a quarter, what is the total transaction costs for payments if each affiliate pays each invoice separately?

Each Affiliate averages 12 purchases from other Affiliates = 15 x 6 = 90 remittances

Total Number of remittances = 90 x 7 = 630 remittances

Total transaction cost if each invoice is paid separately = 630 x 30 = 18,900 

b. What is the total transaction costs for payments if each affiliate aggregates all amounts due for the quarter and makes a single payment to each other affiliate covering that total?

Total Number of remittances considering all invoice payments are aggregated into single remittance by Affiliate = 6 x 7 = 42

Total transaction cost if each invoice is paid separately = 42 x 30 = 1,260 

Payment netting

The following table indicates the aggregate quarterly invoices (in US$) between each affiliated company for a recent quarter.

3a. If the affiliates use bi-lateral payment netting, what payments will be made?

b. What is the total transaction cost for all payments with bi-lateral payment netting?

4a. If the company uses multi-lateral payment netting, what payments should be made? (There are more than one ways to arrange these payments. You only need to indicate on possible way.)

b. What is the total transaction cost for all remittances with multi-lateral payment netting?

5. If the company uses a re-invoice center, there are likely to be more payments and as a result higher transaction costs than with e.g., multi-lateral netting. Why might the company still elect to use a re-invoice center?