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Q: If your wage rate was $21/ hour, what is A on the consumption - leisure...
4. Steve's utility function over leisure and consumption is given by u(L,Y)= min (3L,Y). Wage rate...
4. Steve's utility function over leisure and consumption is given by u(L,Y)= min (3L,Y). Wage rate is w and the price of the composite consumption good is p = 1. (a) Suppose w = 5. Find the optimal leisure - consumption combination. What is the amount of hours worked? (b) Suppose the overtime law is passed so that every worker needs to be paid 1.5 times their current wage for hours worked beyond the first 8 hours. Will this law...
Clark gains utility from consumption c and leisure l and his preferences for consumption and leisure...
Clark gains utility from consumption c and leisure l and his preferences for consumption and leisure can be expressed as U(c, l) = 2(√ c)(l). This utility function implies that Clark’s marginal utility of leisure is 2√ c and his marginal utility of consumption is l √ c . He has 16 hours per day to allocate between leisure (l) and work (h). His hourly wage is $12 after taxes. Clark also receives a daily check of $30 from the...
A worker receives a wage rate w and has L hours of leisure every day (the...
A worker receives a wage rate w and has L hours of leisure every day (the total endowment of hours is 24 hours per day). The government taxes his income at the constant rate T. The worker spends all his income. 1. Write a budget constraint of this individual and plot it. 2. Display graphically what is the optimal consumption-leisure choice for this worker. 3. Imagine that the government increases the tax rate to T 0 . What is the...
A person chooses between leisure and consumption. All of their consumption comes from current income. The...
A person chooses between leisure and consumption. All of their consumption comes from current income. The utility derived from any combination of leisure and consumption is given by U- YL-88Y where U is utility, L is the hours of leisure per week and Yis the number of dollars of income all of which will be spent on consumption. The person can work as many hours as they wish during the week at a constant wage of $4 per hour. There...
1. Janet's utility depends on consumption c and leisure l. She earns a wage equal to...
1. Janet's utility depends on consumption c and leisure l. She earns a wage equal to w per hour, has an investment income equal to M(greater than or equal to) 0 and needs to sleep at least 8 hours a night. Normalize the price of consumption goods at $1. (i) Draw her indifference curves between hours of leisure and consumption, her budget line and her equilibrium choice of c and l. What is the slope of the budget line and...
4. Investment banker chooses between leisure and consumption good. The price of consump tion good is...
4. Investment banker chooses between leisure and consumption good. The price of consump tion good is p. She has super-ability to work for any amount of time between 0 and 24 hours per day. Her per hour wage is w if she works less than 8 hours, and she gets paid overtime salary w' for each hour she works after the 8th hour. Assume that 0<w< w' Also if her income is higher than M, then she has to pay...
On a separate sheet of paper, draw a labor-leisure diagram with consumption ($) on the vertical...
On a separate sheet of paper, draw a labor-leisure diagram with consumption ($) on the vertical axis, and hours of leisure on the horizontal axis. Assume there are 16 discretionary hours in a day, and that wage is $20 per hour, and unearned income, V, is $100. Draw the budget constraint for a day, labeling the endpoints, and draw a utility maximizing indifference curve. Label approximate hours of leisure, labor, and earnings at the optimal point (choose numbers that appear...
2. Papa John has preferences over leisure and consumption represented by U(L,C)=3L3C2, where L is leisure...
2. Papa John has preferences over leisure and consumption represented by U(L,C)=3L3C2, where L is leisure hours per day and C is dollars of consumption per day. Papa John has 12 hours of time available for leisure and a nonlabor income of $100 per day. What is Papa John's reservation wage? A. $0.08/hour B. $0.18/hour C. $8.33/hour D. $12.50/hour
3. Consider a consumer who has well-behaved preferences over leisure (L) and consumption (x) They have...
3. Consider a consumer who has well-behaved preferences over leisure (L) and consumption (x) They have nonlabor income m and have 24 hours in the day that must be divided between leisure and working. They are initially paid a wage w for each hour of work. The price of x is 1 (a) Suppose they optimally choose to work 8 hours. Draw the consumer's budget set and an indifference curve showing this situation. (b) Now suppose that they are paid...
Consider the utility function u (c, o) = oc (o = leisure; c = consumption), determine...
Consider the utility function u (c, o) = oc (o = leisure; c = consumption), determine the optimal amount of consumption and leisure if the consumer can work at most 24 hours, the hourly wage is 5 and the price of each unit of consumption is 2. There is no initial income endowment.
4. Steve's utility function over leisure and consumption is given by u(L,Y)= min (3L,Y). Wage rate is w and the price of the composite consumption good is p = 1. (a) Suppose w = 5. Find the optimal leisure - consumption combination. What is the amount of hours worked? (b) Suppose the overtime law is passed so that every worker needs to be paid 1.5 times their current wage for hours worked beyond the first 8 hours. Will this law...
A person chooses between leisure and consumption. All of their consumption comes from current income. The utility derived from any combination of leisure and consumption is given by U- YL-88Y where U is utility, L is the hours of leisure per week and Yis the number of dollars of income all of which will be spent on consumption. The person can work as many hours as they wish during the week at a constant wage of $4 per hour. There...
4. Investment banker chooses between leisure and consumption good. The price of consump tion good is p. She has super-ability to work for any amount of time between 0 and 24 hours per day. Her per hour wage is w if she works less than 8 hours, and she gets paid overtime salary w' for each hour she works after the 8th hour. Assume that 0<w< w' Also if her income is higher than M, then she has to pay...
3. Consider a consumer who has well-behaved preferences over leisure (L) and consumption (x) They have nonlabor income m and have 24 hours in the day that must be divided between leisure and working. They are initially paid a wage w for each hour of work. The price of x is 1 (a) Suppose they optimally choose to work 8 hours. Draw the consumer's budget set and an indifference curve showing this situation. (b) Now suppose that they are paid...
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