Question

2. An individual utility function is given by U(c,h) = c·h, where c represents consumption during...

2. An individual utility function is given by U(c,h) = c·h, where c represents consumption during a typical day and h hours of leisure enjoyed during that day. Let l be the hours of work during a day, then l + h = 24. The real hourly market wage rate the individual can earn is w = $20. This individual receives daily government transfer benefits equal to n = $100. For the graphical analysis of this individual’s utility maximization problem, consumption c is plotted on the vertical axis and hours of leisure h is plotted on the horizontal axis. The y-intercept for this individual’s full income constraint is [y]. (NOTE: Write your answer in number format, with 2 decimal places of precision level; do not write your answer as a fraction. Add a leading zero and trailing zeros when needed.)

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
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
Similar Questions
1. A firm production function is given by q(l,k) = l0.5·k0.5, where q is number of...
1. A firm production function is given by q(l,k) = l0.5·k0.5, where q is number of units of output produced, l the number of units of labor input used and k the number of units of capital input used. This firm profit function is π = p·q(l,k) – w·l – v·k, where p is the price of output, w the wage rate of labor and v the rental rate of capital. In the short-run, k = 100. This firm hires...
An individual utility function is given by U(x,y) = x·y1/2. This individual demand equation for x...
An individual utility function is given by U(x,y) = x·y1/2. This individual demand equation for x is a factor a of I/px: x* = a (I/px). In this specific case, factor a is equal to [a]. (NOTE: Write your answer in number format, with 2 decimal places of precision level; do not write your answer as a fraction. Add a leading zero and trailing zeros when needed.)
3. Suppose that an individual’s utility function for consumption, C, and leisure, L, is given by...
3. Suppose that an individual’s utility function for consumption, C, and leisure, L, is given by U(C, L) = C 0.5L 0.5 This person is constrained by two equations: (1) an income constraint that shows how consumption can be financed, C = wH + V, where H is hours of work and V is nonlabor income; and (2) a total time constraint (T = 1) L + H = 1 Assume V = 0, then the expenditure-minimization problem is minimize...
Santi derives utility from the hours of leisure (l) and from the amount of goods (c)...
Santi derives utility from the hours of leisure (l) and from the amount of goods (c) he consumes. In order to maximize utility, he needs to allocate the 24 hours in the day between leisure hours (l) and work hours (h). Santi has a Cobb-Douglas utility function, u(c, l) = c 2/3 l 1/3 . Assume that all hours not spent working are leisure hours, i.e, h + l = 24. The price of a good is equal to 1...
Santi derives utility from the hours of leisure (l) and from the amount of goods (c)...
Santi derives utility from the hours of leisure (l) and from the amount of goods (c) he consumes. In order to maximize utility, he needs to allocate the 24 hours in the day between leisure hours (l) and work hours (h). Santi has a Cobb-Douglas utility function, u(c,l) = c2/3l1/3. Assume that all hours not spent working are leisure hours, i.e, h + l = 24. The price of a good is equal to 1 and the price of leisure...
Suppose Tom has a utility function U=C*L C= consumption L= hours of leisure Tom has 100...
Suppose Tom has a utility function U=C*L C= consumption L= hours of leisure Tom has 100 hours to divide between work and leisure per week wage is $20/hr 1. Write down budget constraint in terms of consumption and hours of work 2.Tom make decisions on hours of work, leisure and consumption to max. utility. Explain why we can collapse this problem to one in which he chooses hours of leisure only 3. Find optimal hours of work and total consumption...
Consider an individual with preferences given by ?(?, ?) = 2?^1/2 . C^1/2 where C is...
Consider an individual with preferences given by ?(?, ?) = 2?^1/2 . C^1/2 where C is consumption and L is leisure. Suppose the total time available each day is 16 hours, the wage rate is $8, the price of the consumption good is normalized to $1, and non-labour income is $50. (i) What is the individual’s reservation wage? Will the individual participate in the labour market? (ii) What is the optimal time spent working given these preferences and budget constraint?
Let Jane's Utility function be given by: U=100 x ln(C) + 50 x ln(L) where C...
Let Jane's Utility function be given by: U=100 x ln(C) + 50 x ln(L) where C is consumption (in dollars) per year and L is hours of leisure per year. Jane can make $15 per hour and can work up to 2,000 hours per year. a. set up the maximization problem, showing the budget constraint. b. How many hours will Jane want to work per year
Adam has a utility function U(C,R) = CR, where R is leisure and C is consumption...
Adam has a utility function U(C,R) = CR, where R is leisure and C is consumption per day. He has 16 hours per day to divide between work and leisure. Mark has a non-labor income of $48 per day. (a) If Mark is paid a wage of $6 per hour, how many hours of leisure will he choose per day? (b) As a result of a promotion, Mark is now paid $ 8 per hour. How will his leisure time...
Adam has a utility function U(C,R) = CR, where R is leisure and C is consumption...
Adam has a utility function U(C,R) = CR, where R is leisure and C is consumption per day. He has 16 hours per day to divide between work and leisure. Mark has a non-labor income of $48 per day. (a) If Mark is paid a wage of $6 per hour, how many hours of leisure will he choose per day? (b) As a result of a promotion, Mark is now paid $ 8 per hour. How will his leisure time...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT