Need as much details as possible. Microeconomics. Peter can work 24 hours a day if he wants

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Need as much details as possible. Microeconomics.

Peter can work 24 hours a day if he wants to and gets wage w per hour worked. His utility from leisure (work-free time) and consumption is U(C,L)=CL. If the wage of Peter goes up, which of the following statements is always correct?

a. The substitution effect on consumption means that consumption goes up.

b. The total effect on leisure means that leisure goes down.

c. The income effect on leisure means that leisure goes down.

d. The total effect on consumption is zero.

Related Book For answer-question

Intermediate Microeconomics

ISBN: 978-0393123968

9th edition

Authors: Hal R. Varian

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Posted Date: Feb 06, 2024 12:47 AM

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Need as much details as possible. Microeconomics. Peter can work 24 hours a day if he wants

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The detailed answer for the above question is provided below When Peters wage increases it affects both his consumption and leisure choices To analyze ... View the full answer

Intermediate Microeconomics

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