Question

A representative consumer has preferences described by the utility function:u(c) = lnc,wherecdenotes consumption. Assume that the...

A representative consumer has preferences described by the utility function:u(c) = lnc,wherecdenotes consumption. Assume that the total number of hours available to theworker are ̄h= 1. The consumer/worker receives the wage,w, for her labor services.A. Obtain the labor supply curve.B. Introduce a proportional tax on labor income,τw. Obtain the new labor supply curve.C. Introduce a proportional tax on consumption,τc. Obtain the new labor supply curve

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Answer :

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
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...
1. Consider the representative consumer’s problem as follows. The representative consumer maximizes utility by choosing the...
1. Consider the representative consumer’s problem as follows. The representative consumer maximizes utility by choosing the amount of consumption good C and the amount of leisure l . The consumer has h units of time available for leisure l and for working Ns , that is, h = l+Ns . Government imposes a proportional tax on the consumer’s wage income. The consumer’s after-tax wage income is then (1−t )w(h −l ), where 0 < t < 1 is the tax...
Suppose the representative consumer’s preferences are given by the utility function, U(C, l) = aln C...
Suppose the representative consumer’s preferences are given by the utility function, U(C, l) = aln C + (1- a) ln l Where C is consumption and l is leisure, with a utility function that is increasing both the arguments and strictly quiescence, and twice differentiable. Question: The total quantity of time available to the consumer is h. The consumer earns w real wage from working in the market, receives endowment π from his/her parents, and pays the T lump-sum tax...
In the labor-leisure model, the representative consumer receives satisfaction from consumption of goods (C) and from...
In the labor-leisure model, the representative consumer receives satisfaction from consumption of goods (C) and from the consumption of Leisure (L). Let C be the composite good with price $1 and L determines the number of hours of leisure this person consumes. Therefore U = f(C,L) for this consumer. This consumer’s consumption is constrained by time and income. Let her non-labor income, V, be $1200 per week, let the hourly wage rate be $8 and h be the number of...
A representative consumer living in a Country A values consuming goods (C) and enjoys leisure (l)....
A representative consumer living in a Country A values consuming goods (C) and enjoys leisure (l). The consumer has h = 1 units of time to divide between working and enjoying leisure. For each hour worked, he receives w = 1.5 units of the consumption good. The consumer also owns shares in a factory which gives him an additional π = 0.55 units of income. The government in this economy taxes the consumer and uses the proceeds to buy consumption...
Assume the representative consumer lives in two periods and his preferences can be described by the...
Assume the representative consumer lives in two periods and his preferences can be described by the utility function U(c,c′)=c1/3 +β(c′)1/3, where c is the current consumption, c′ is next period consumption, and β = 0.95. Let’s assume that the consumer can borrow or lend at the interest rate r = 10%. The consumer receives an income y = 100 in the current period and y′ = 110 in the next period. The government wants to spend G = 30 in...
Jack has preferences for consumption and leisure that can be described by the !/# $/# preferences:...
Jack has preferences for consumption and leisure that can be described by the !/# $/# preferences: ?(?, ?) = ? ? . Assume he has 24 hours to to split between work and leisure. Find jacks ??%, ??&, ??? |???| Assume Jack’s wage is $20. Find Jack’s optimal combination of consumption and leisure. How many hours will he work? Now assume Jack grandmother sends Jack $40 a day because he is her favorite. All else equal, how many hours will...
Consider a consumer with Cobb-Douglas preferences over two goods, x and y described by the utility...
Consider a consumer with Cobb-Douglas preferences over two goods, x and y described by the utility function u(x, y) = 1/3ln(x) + 2/3n(y) 1. Assume the prices of the two goods are initially both $10, and her income is $1000. Obtain the consumer’s demands for x and y. 2. If the price of good x increases to $20, what is the impact on her demand for good x? 3. Decompose this change into the substitution effect, and the income effect....
Suppose that a worker’s utility (i.e., preferences) with respect to total income (Y) and hours of...
Suppose that a worker’s utility (i.e., preferences) with respect to total income (Y) and hours of leisure time per week (LT) can be represented by the following Cobb-Douglas utility function: U = Y0.4 ∙ LT0.6 (note: A=1; α=0.4; β=0.6) Assume that the market wage is $25 per hour of work (H), and his/her non-labor income is $300 per week. The worker has 70 hours per week to allocate between labor market activity and leisure time (i.e., T = 70). Given...
Suppose u=u(C,L)=4/5 ln⁡(C)+1/5 ln⁡(L), where C = consumption goods, L = the number of days taken...
Suppose u=u(C,L)=4/5 ln⁡(C)+1/5 ln⁡(L), where C = consumption goods, L = the number of days taken for leisure such that L=365-N, where N = the number of days worked at the nominal daily wage rate of $W. The government collects tax on wage income at the marginal rate of t%. The nominal price of consumption goods is $P. Further assume that the consumer-worker is endowed with $a of cash gift. a) Write down the consumer-worker's budget constraint. b) Write down...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT