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Unformatted text preview: 4. Note concept of non market activities includes household production (cooking meals, raising children, etc), sleeping as well as pure leisure. 5. We will model the decision between 2 goods, leisure (l) and income (Y)/consumption. 6. Indifference Curves (Preferences) All the combinations of income and leisure that yield the same total utility. 7. Income Constraint (Budget Constraint) All the combinations of leisure and income that are attainable by the household given income and prices (wage). 8. Utility Maximizing Combination of Income and Leisure The individual will try to maximize her utility subject to the income constraint. Put together the individuals indifference curves map and income constraint to obtain the optimal choice. 9. Comparative Statics To analyze the effects of changes in key features of economic environment (including non-labour income and wage) on individuals labour supply decision. 10. Individual Supply Curve...
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- Spring '11