Thomas earns £12 per hour in his current job and works 36 hours a week. He loves his job and puts in his maximum effort with no disutility. In fact, Thomas earns extra utility worth £3 per hour from camaraderie, status, and enjoyment of the job. If he loses this job Thomas has two choices. Either he is able to be self-employed, which earns him £7 an hour for 36 hours a week of work but also gives him disutility equivalent to £2 per hour, or he can be unemployed and receive an unemployment benefit of £150 per week. Thomas is expected to be able to find another job similar to his current one in 24 weeks. Ceteris paribus, explain whether and how the following changes would affect his employment rent. a. He receives a pay rise of £2 per hour but his enjoyment of the job decreases to £1 per hour.
b. He reduces his working week for the current job to 32 hours a week, which increases his enjoyment from the job by an extra £1 per hour.
c. The unemployment benefit decreases to £120 per week.
d. Self-employment would only bring in 32 hours of work a week.