Unformatted text preview: 3. In the theoretical model of retirement, workers get utility from time retired and what? [hint: U=f( __, R)]. Consumption . (The worker has a trade off between retiring and continuing to work for a wage rate that is greater than the retirement pension received. Income is used by an individual to purchase consumption goods… the wages itself does not give you utility – you get utility from the consumption goods you buy with the wages.) 4. For the graphs below, label which is showing an increase in the age and which shows an increase in pension. Increase in wage Increase in pension (See figure 3.6 in the book) 5. True or False: The household opportunity set of a couple is at least as good as the opportunity set of each individual. True ....
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- Fall '07