Dashed line just splits the amount in half. Yellow parallelogram is region of gain for both Red and Blue.
M
M/2
Y
H/2
14
H
Home Goods, $
Market Goods, $
Increase in Blue’s wage $20 → $25 Budget lines of Blue and Red when single.
5
Housework Time of Husband and Wife, Korea
Source: KTUS 2004
Household Production
6
An economic definition of marriage: long-term partnership for the purpose of joint production, joint consumption, investment, and risksharing
Blue: specializes in Market Red: does some of both.
M•
•
Y•
Hale Waihona Puke Household Production Possibility Frontier
11
H
•
Home Goods, $
Market Goods, $
Blue and Red form a household How do they maximize their utility?
350 •
250 200