150_a_hw1

150_a_hw1 - Economics 150A Labor Economics Assignment 1...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Economics 150A Labor Economics Assignment 1 Spring 2011 Due date: Fri, April 29 at the beginning of class. Follow the homework guidelines as posted on the webpage (see http://econ.ucsb.edu/~benelli/homework_guidelines.htm ). 1. Mike has a utility function represented by U(C,L) = 3C 2 L. He has 20 hours to devote to labor and leisure. His current wage is $12 per hour. a. Find his utility maximizing labor and leisure choice. b. Now suppose he is given non-labor income of $60. Find his utility maximizing labor and leisure choice. c. Find the non-labor income he would need to be indifferent between working (the number or hours you found in part a) and not working. 2. Shane currently receives welfare in the amount of $80 per day if he doesn’t work. His utility function is U(C,L) = C 1/2 L. Wages=$9 and he has 18 hours to allocate between work and leisure. a. Find his utility maximizing labor and leisure choice. Assume he is not eligible for welfare. b.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

150_a_hw1 - Economics 150A Labor Economics Assignment 1...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online