Aristotle Earns 5 Dollars Per Hour

Aristotle earns 5 dollars per hour.He has 110 hours per week available for either labor or leisure.In the old days he paid no taxes and received nothing from the government.Now he gets a $200 payment per week from the government but he must pay half of his labor income in taxes.(His before-tax wages are the same as they were before, and he has no other source of income than wages and payments from the government.) He notices that with the government payment and his taxes, he can exactly afford the combination of leisure and consumption goods that he used to choose.How many hours per week did he work in the old days?

A) 100
B) 20
C) 45
D) 60
E) None of the above.

Correct Answer:

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