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...
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 hours will she devote to leisure activities, and how much does she choose to spend on consumption each day? (Note: use the tangency condition and budget constraint to solve).
Homework Answers
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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...
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MX^2, where U is her
utility, M is her(daily) money income and x is her(daily)
leisure hours. Each
day, the individual needs 6 hours for sleeping and other
essential personal matters
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3. Suppose an individual has a utility function U=U(M,X)=10
MX^2, where U is her
utility, M is her(daily) money income and x is her(daily)
leisure hours. Each
day, the individual needs 6 hours for sleeping and other
essential personal matters
3. Suppose an individual has a utility function U = U(M,X) = 10 MX, where U is her utility, M is her (daily) money income and X is her (daily) leisure hours. Each day, the individual needs 6 hours for...
3. Suppose an individual has a utility function U=U(M, X)=10
MX^2, where U is her
utility, M is her(daily) money income and x is her(daily)
leisure hours. Each
day, the individual needs 6 hours for sleeping and other
essential personal matters
3. Suppose an individual has a utility function U = U(M,X) = 10 MX', where U is her utility, M is her (daily) money income and X is her (daily) leisure hours. Each day, the individual needs 6 hours...
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