Question: Suppose representative consumer preferences can be expressed as U = al + bC, where a & b are constants. The budget constraint, consumer faces is
Suppose representative consumer preferences can be expressed as U = al + bC, where a & b are constants. The budget constraint, consumer faces is C = w(h - l). Question 32 options: 1) for consumer, leisure and consumption are perfect substitutes 2) Consumer will optimize with no units of consumption goods, if a/b > w 3) Consumer will optimize with no units of leisure, if a/b
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
