Question:Let w denote the wage rate, let V denote weekly non-labour income, and let T be the number of hours in the week. In addition, assume that wages are taxed at rate t, so that the after-tax wage rate is w(1-t).

a. Sketch the budget constraint. Label the x-axis, the y-axis, the x-intercept, the y-intercept, the slope and the endowment point.

b. On the same graph as above, show how an increase in t will affect a worker’s budget constraint.

c. Suppose that when the tax rate goes up, people’s labour supply decreases. Use your graph to illustrate the income effect, the substitution effect and the total effect.

d. Which effect dominates?

e. Suppose that the government plans to increase tax rates in order to increase tax revenues. Is an increase in the tax rate guaranteed to increase tax revenues?

Explain. Your answer should include a discussion of the substitution effect and the income effect. Note: the tax revenues generated by a worker who works h hours are given by: Revenue = t×h×w.

Qualitative researchers can use questionnaires to collect data. Suppose a qualitative researcher is interested in the behaviors of physicians that have high ratings of patient satisfaction. The research goal is to identify the behaviors of successful physicians so that these behaviors can be built into the curricula of medical preparation programs. The researcher undertakes a case study and uses three instruments to gather data.

1. First, the researcher gives a likert-scale questionnaire to patients of a select group of physicians to determine the perceived behaviors that lend to higher levels of satisfaction.

2. Second, the researcher reviews video recordings of physician-patient encounters from 10 physicians who have been rated highly by patients in a reliable satisfaction survey.

3. Third, the researcher interviews patients to glean more detail about physical behaviors that improve patient satisfaction.

How might these data be analyzed separately and then triangulated as the researcher presents the results?