| Author: | Homework Help Classof1 | ISBN: | 1230000135294 |
| Publisher: | Classof1 | Publication: | May 23, 2013 |
| Imprint: | Language: | English |
| Author: | Homework Help Classof1 |
| ISBN: | 1230000135294 |
| Publisher: | Classof1 |
| Publication: | May 23, 2013 |
| Imprint: | |
| Language: | English |
"Mike’s utility of consumption and leisure is U(C, L) =C*L, so that his marginal rate of substitution is C/L. There are 168 hours in the week and he earns $10 an hour.
a) What is his optimal combination of C and L?
b) If the government starts a welfare policy that pays B to all non workers and 0 to all workers, at what value of B will Mike opt out of the labor force and go on welfare?
"
"Mike’s utility of consumption and leisure is U(C, L) =C*L, so that his marginal rate of substitution is C/L. There are 168 hours in the week and he earns $10 an hour.
a) What is his optimal combination of C and L?
b) If the government starts a welfare policy that pays B to all non workers and 0 to all workers, at what value of B will Mike opt out of the labor force and go on welfare?
"
