ZuoTi.Pro
Question

Suppose a consumer maximizes U(C,l)=ln(C)+ln(l), where C is consumption and l is leisure. The maximum time...

Suppose a consumer maximizes U(C,l)=ln(C)+ln(l), where C is consumption and l is leisure. The maximum time available for work and leisure is 1. Suppose a firm uses the following production function Y=z*Nd where Nd is labor used in production. The government collects a lump-sum tax T to finance government consumption G. Assume z=10 and G=6 and solve for the competitive equilibrium.

What is the equilibrium wage rate?

What is the equilibrium leisure level?

What is the equilibrium consumption level?

What is the equilibrium output (GDP)?

What is the equilibrium labor supplied?

What is the equilibrium level of firm profit?

Please answer EACH QUESTION FULLY and ACCURATELY. Thank you! I will give 5 star review!

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
Suppose a consumer maximizes U(C,l)=ln(C)+ln(l), where C is consumption and l is leisure. The maximum time...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Suppose the representative household has the following utility function: U (C; l) = ln C +...

    Suppose the representative household has the following utility function: U (C; l) = ln C + 0:5 ln l where C is consumption and l is leisure. The householdís time constraint is l+N=1 where Ns is the representative householdís labour supply. Further assume that the production function is Cobb-Douglas zK0:5 (N)0:5 where z = 1 and K = 1: 2.1 Assuming that the government spending is G = 0; use the Social Plannerís problem to solve for Pareto optimal numerical...

  • Consider an economy in which the representative consumer preferences are described by U(C, l) = 0.9...

    Consider an economy in which the representative consumer preferences are described by U(C, l) = 0.9 ln(C) + 0.1 ln(l). The total number of hours available to the representative consumer is h = 1, and the market real wage is w. The representative firm produces the final consumption good using the technology function Y = zN where N is the labour, and z = 2. Assume the government sets the level of its spending to G = 0.75 which has...

  • 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...

  • Consider a representative consumer who has preferences over an aggregate consumption good c and leisure l....

    Consider a representative consumer who has preferences over an aggregate consumption good c and leisure l. Her preferences are described by the utility function: U(c,l) = ln(c) + ln(l) The consumer has a time endowment of h hours which can be used to work at the market or enjoyed as leisure. The real wage rate is w per hour. The worker pays a proportional wage tax of rate t, so the worker’s after-tax wage is (1−t)w. The consumer also has...

  • Mr. Simpson’s preferences for consumption and leisure can be expressed as U(C,L)=(C-100)(L-68). There are 168 hours...

    Mr. Simpson’s preferences for consumption and leisure can be expressed as U(C,L)=(C-100)(L-68). There are 168 hours in a week available for him to split between work and leisure. He earns $20 per hour after taxes. He also receives $300 worth of welfare benefits each week regardless of how much he works. What is Mr. Simpson’s optimal level of consumption? What is Mr. Simpson’s reservation wage? Suppose that in addition to the $300 government welfare, Mr. Simpson receives from his oversea...

  • Problem #1: Optimal labor supply Clark gains utility from consumption c and leisure l and his...

    Problem #1: Optimal labor supply 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...

  • 13) Consider the standard labor-leisure choice model. Consumer gets utility from consumption (C) and leisure (L)....

    13) Consider the standard labor-leisure choice model. Consumer gets utility from consumption (C) and leisure (L). She has H total hours. She works N S hours and receives the hourly wage, w. She has some non-labor income π and pays lump-sum tax T. Further suppose (π – T) > 0. The shape of utility function is downward-sloping and bowed-in towards the origin (the standard U- shaped case just like a cobb-douglas function) If this consumer decides to NOT WORK AT...

  • 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

  • 4. Let a person's utility function over consumption, X, and leisure, L, be given by U...

    4. Let a person's utility function over consumption, X, and leisure, L, be given by U = XL2, SO MUx = L2 and MUL = 2xL.The individual may work up to 24 hours per day at wage rate, w = $10 per hour, and he has non-labor income of $50 per day. The price of x, px, is $5. (a) Find the utility-maximizing x and L. (b) Show that at the utility- maximizing quantities of x and L, the consumer's...

  • Consider the following information about the model economy U(c,l) = log(c) + log(l) Ns=1-l F(K, N)=2K0.5N0.5...

    Consider the following information about the model economy U(c,l) = log(c) + log(l) Ns=1-l F(K, N)=2K0.5N0.5 N=labor l=leisure K=capital 1. Suppose further that there are no taxes. What is the optimality condition between the choices of consumption and labor supply? 2. what is the marginal product of labor? 3. what is the optimality condition for the firm? 4. what is the labor demand function for the firm? 5. what is the supply of consumption good in terms of the wage...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT