Assume Mindy gains utility from consumption C and leisure L. The total non-labor income she gets is
Fantastic news! We've Found the answer you've been seeking!
Question:
Assume Mindy gains utility from consumption C and leisure L. The total non-labor income she gets is $550 per week and the total non-sleeping time she can allocate between work and leisure is 110 hours per week. Her utility function is U(L, C) = L*C.
a. What is the marginal rate of substitution of L for C?
b. Calculate Mindy's reservation wage.
c. If Mindy's non-labor income increases to $770 per week, what happens to her reservation wage?
Related Book For
Posted Date: