Suppose that you have the following utility function:
U (L,Y ) = LY + 2Y , where L is hours of leisure and Y is other goods. The price
of Y is 1. For now suppose that wages are your only source of income. You
allocate 18 hours a day between work and leisure (and sleep during the remaining 6 hours).
- Assume that your hourly wage is 1. Write down your budget constraint.
- How many hours of labour would you supply when your hourly wage is 1? You can use any method you want.
- Now suppose that your hourly wage increases to 2. How many hours of labour would you supply now?
- Finally, imagine that you have received an inheritance which always pays you 8 dollars per day. The hourly wage is still 2. How many hours of labour will you supply?
Recently Asked Questions
- Kindly help me out with these questions. Thank you 1. Identify, from the chart, the three metabolic stages of aerobic respiration. a. Glycolytic
- I don't know how to solve problem 4. Problem 5,6,7 are all part of Problem 4.
- An object of mass = 2.00 kg is attached to a spring with spring constant k = 88.0 N/m whose unstretched length is l = 0.150 m and whose far end is fixed to a