This preview shows page 1. Sign up to view the full content.
Unformatted text preview: H = 16 hours of time available to her between labor ( l ) and leisure ( H ² l ) . Her only source of income is from the wages she obtains by working. She earns w = 3 dollors per hour; thus, if she works l 2 [0 ; H ] hours, her total income is wl dollors. She spends her income on food ( f ) and entertainment ( e ) which cost p = 1 dollar and q = 1 dollar respectively. Her utility function is given by u ( f; e; l ) = f 1 3 e 1 3 ² l 2 . Solve the optimal consumptionleisure plan. 1...
View
Full
Document
This note was uploaded on 02/09/2012 for the course ECON 401 taught by Professor Siyang during the Spring '11 term at Rice.
 Spring '11
 Siyang
 Economics, Utility

Click to edit the document details