You earn $15 per hour in your current job and work 35 hours a week. This job has no other utility or disutility. If you lose this job, you can be self-employed, which earns you $9 an hour for 35 hours a week of work but also gives you enjoyment equivalent to $3 per hour. You are expected to be able to find another job similar to your current one in 30 weeks if you lose your
current job.
a) (4 points) Calculate your per-hour employment rent and total employment rent.
b) (3 points) Suppose the government decided to give unemployment benefits of $450 a week to all unemployed people. What will be your new per-hour and total employment rent for your current job?
c) (3 points) Calculate the minimum weekly unemployment benefit that will make you not want to be self-employed if you get fired from your current job.
