Jennifer is a single mother oered a job at $15/hour. She has $100 of non-labor income per week (obtained via child support).
a. Jennifer's mother watches the baby for free while she works. What is Jennifer's total weekly income if she works 20 hours/week?
b. As Jennifer's baby gets older (and more mobile), the baby is too much for Jennifer's mother to take care of during the day. As a result, Jennifer must now use market childcare, costing $25/week in xed costs (transportation costs) and $10/hour in variable costs. How many hours must Jennifer now work to obtain the same total weekly income as before when she had access to free childcare?
c. If the childcare center does not allow one to pay by the hour, but instead requires one to pay for full-time care (40 hours/week) in order to have access to any care, what will Jennifer's income be (assuming the same xed and per hour cost of care as in (b) if she (i) decides not to work at all and (ii) increases her labor supply to 40 hours/week?