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Unformatted text preview: 2. (10 points) Replicate and update fgure1.4 rom the textbook. What could be said about recent trends? 3. (10 points) Replicate and update table 1.1 rom the textbook. Describe it. 4. (15 point each) Review questions rom Chapter 2, questions 1, 4, and 7. 5. (20 points) Hillarys preerence or consumption and leisure is given by U ( C,L ) = ( C 200)( L 80) There are 168 hours in the week available to split between work and leisure. She earns 5 dollars per hour ater tax. She also receives 320 dollars worth o welare benefts each week regardless o how much she works. a. Graph Hillarys budged line. b. What is Hillarys marginal rate o substitution when L=100 and she is on her budget line? c. What is Hillarys reservation wage? d. Find Hillarys optimal amount o consumption and leisure. c. What is the value o the Lagrange Multiplier? What is the interpretation o it. 1...
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This note was uploaded on 08/31/2011 for the course STAT 3101 taught by Professor Erick during the Spring '11 term at Minnesota.
- Spring '11