Jack gives each of his sister $600 in non-labor income per week. Each sister has 100 hours per week to spend on labor or leisure, and each can earn a wage of $30 per hour.
part a. (4 points) Suppose Allison weekly utility function can be written as U=CL2, which gives her a marginal rate of substitution (MUL/MUC) equal to 2C/L. where C is the amount of consumption (in $) and L is the hours of leisure she gets in a week.
B (4 points) Solve for Allison’s utility if she can work her desired number of hours (as found in part a).
i What would her utility be if she was forced to work 30 hours per week? How much extra consumption money would it take to make her as happy as she was before?
ii What would her utility be if she was forced to work 40 hours per week? How much extra consumption money would it take to make her as happy as she was before?
iii Comment on what this tells us about Allison’s feelings toward leisure and consumption
Jack gives each of his sister $600 in non-labor income per week. Each sister has 100...
Jack gives each of his sister $600 in non-labor income per week. Each sister has 100 hours per week to spend on labor or leisure, and each can earn a wage of $30 per hour. part a. (4 points) Allison utility is more accurately represented by the function U=CL2, which gives her a marginal rate of substitution (MUL/MUC) equal to 2C/L. where C is the amount of consumption (in $) and L is the hours of leisure she gets in...
Gina works at a diner. She has 100 hours each week to spend at labor/leisure, earns a wage of $15 per hour, and works in a fancy modern restaurant that doesn't involve tips from customers. She has no sources of non-labor income, but she does have to pay $200 per week in childcare for her precious baby Carlos (regardless of how many hours she actually utilizes the childcare). Her utility function is U 1. 0.001CL2 (3 points) Each week she...
Takashi has non-labor income from his investments of I= $80 per day, and can earn an hourly wage at his job of $30 per hour. Assume Takashi can work (or not work) as much as 24 hours in a day. a. Write a formula for Takashi’s budget constraint as a function of L (leisure hours) and C (consumption spending per day).Draw a diagram showing this budget constraint. b. Suppose Takashi’s utility function is given by U = 2lnL+ lnC, where...
Please be clear. Thank you! Problem 2 (30 points): Kirpa is trying to decide how many bours to work each week. Her utlity is given by the following function: U(C,H)CH3, where C represents weekly consumption and H represents weekly leisure bours. Her marginal utility with respect to consumption is MUc -2cH, and her marginal utility with respect to leisure is MUH 3C3H Assume Kirpa has some assets a that she uses for weekly consumption, so that her weekly budget constralnt...
4.1 Cindy gets utility from consumption (C) and leisure (L), and has a weekly timebudget ofT= 110 hours. Her utility function isU(C, L) =C∗L. She receives$660 each week from her great-grandmother regardless of how much Cindy works.What is Cindy’s reservation wage? 4.2What is Cindy’s optimal labor supply (h) and consumption (C) if her wage is10 dollars per hour? Show your work.4.3 4.3 What is her optimal labor supply and consumption if her wage is 5 dollars perhour? What is her...
Kirpa is trying to decide how many hours to work each week. Her utility is given by the following function: U(C,H) = C2 H3 , where C represents weekly consumption and H represents weekly leisure hours. Her marginal utility with respect to consumption is MUc = 2CH3 , and her marginal utility with respect to leisure is MUH = 3C2 H2 . A) Find Kirpa's optimal H, L and C when w=$7.50 and a = $185. B) Suppose w increases...
INCOME (Dollars) Kate has 80 hours per week to devote to working or to leisure. She is paid an hourly wage and can work at her job as many hours a week as she likes. The following graph illustrates Kate's weekly income-lelsure tradeoff. The three lines labeled BC, BC, and BC illustrate her time allocation budget at three different wages; points A, B, and C show her optimal time allocation choices along each of these constralints BC 1200 BC 800...
Rosa has 80 hours per week to devote to working or to leisure. She is paid an hourly wage and can work at her job as many hours a week as she likes. The following graph illustrates Rosa's leisure-consumption tradeoff. The three lines labeled BC1, BC2, and BC3 illustrate her time allocation budget at three different wages; points A, B, and C show her optimal time allocation choices along each of these constraints. CONSUMPTION (Dollars per week) 1,200 BC 800...
7. ) Shelly's preferences for consumption and leisure can be expressed as U(C, L) (C-100) x (L-40). This utility function implies that Shelly's marginal utility of leisure is C- 100 and her marginal utility of consumption is L - 40. There are 110 (non-sleeping) hours in the week available to split between work and leisure. Shelly earns S10 per hour after taxes. She also receives $320 worth of welfare benefits each week regardless of how much she works a) Graph...
Sonya’s utility function is given by: U = C.25L.75,MUC= .25C-0.75L0.75, MUL= .75C0.25L-0.25 Where C is income and she spends her entire income on consumption, L is the number of hours spent each day in leisure. Assume that her current wage rate is $12 per hour worked, she has no non-work income, and she can work as many hours as she wishes per day (not to exceed 24 hours of course). How many hours will Sonya choose to work, how many...