Question: Assume that Hap's utility function is U (C,L) = CM * L where C is consumption measured by total income and L is leisure and

Assume that Hap's utility function is U (C,L) = CM * L\" where C is consumption measured by total income and L is leisure and is a normal good. Total income is labour income and non-labour income. He has 3; = $20 non-labour income and a total of 40 hours to allocate between work (consumption) and leisure at the market wage rate of w = $6 per hour. (Hint: marginal utility of leisure arid consumption are MUL = 0.6 t if\" at C "-4 and MUc = 0.4 i I.\" )k 6"\

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Sarah gains utility from consumption, C , and leisure, L . Assume Sarah can either work or use leisure time for 1 2 0 hours per week. Sarah s utility function is U ( C , L ) = CL . Sarah receives $V...

1. (25 points). Suppose household preferences are described by the utility function 1 U (C, l) = aC (B 1) - ( - where C stands for consumption of market goods and stands for leisure. For simplic-...

1. Sergio derives utility from consmnption and leisure U (c, l} = 33431! 4. The price of consumption is R, and for every hour he works he earns wage \"LU. Sergiois total time available is T, so that...

An agent has preferences defined over a consumption good and leisure. His utility function is U = (c - )2 l, where c is the amount of consumption good he consumes and l is the amount of leisure time....

The goal of this exercise is to apply the income and substitution effects learned in lecture to the topic of labor supply.1 Junyi likes two goods: a consumption good c and leisure l. He maximizes the...

!Solve the following problems. 1. An exchange economy has two dates t = 0, 1 and two states of nature s = 1,2 which will be revealed at date 1. Unlike the model in class, agents in this economy do...

Question 1 : Labor Supply Decision in a Partial Equilibrium Model Consider a worker who chooses how many hours to work, L , given a fixed wage w and a fixed amount of non - labor income M . The...

There are 800 consumers in an economy that each have the same utility function given by U(c, l) = 32c^1/2(24l)^2 where c is their consumption and l is the number of hours they spend for leisure. A...

consider the Consider the following consumer's problem facing a proportional income tax. Utility function over consumption (C) and leisure (L) U(C,L) = 3 |n(C) + 2 |n(L) Total hours: H = 40 Labour...

Consider the following consumer's problem facing a proportional income tax. Utility function over consumption (C) and leisure (L) U(C,L) = 2 ln(C) + 3 ln(L) Total hours: H = 40 Labour hours: NS = H -...

Complete the W-4 for employment at Bernie's Bar and Grill Kierstan Amber Winter-Casey 542 Sole Point Road Sitka, Alaska 99835 SSN: 988-65-3124 Single, head of household 2 dependents Eligible for the...

Plot the following data and specify the type of relationship between the two variables. (Place Price on the vertical axis and Quantity Supplied on the horizontal axis.) Price of Apples ($)Quantity...

I was reading about some benefits of a low WACC. I found that it helps the company borrow funds at a relatively low cost, also offering more significant investment opportunities and increasing...

QUESTION 1 Deja is about to buy a new winter jacket. The number of brands that carry winter jackets is very large, but she has narrowed down her search to four different jackets she is evaluating and...

3. How much information do we need to collect?

2. What types of information are we collecting?

5. How quickly can we manage to collect the information?