=+e.** Can you show that if tastes can be represented by the CES utility function u1c,,2 5
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=+e.** Can you show that if tastes can be represented by the CES utility function u1c,,2 5 1ac 2r 11 2 a2, 2r 2 21/r
, the worker will choose to consume more leisure as well as work more when there is an increase in the leisure endowment L? (Warning: The algebra gets a little messy. You can occasionally check your answers by substituting r 5 0 and checking that this matches what you know to be true for the Cobb–Douglas function u1c,,2 5 c 0.5, 0.5.)
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Related Book For
Microeconomics An Intuitive Approach With Calculus
ISBN: 9781337335652,9781337027632
2nd Edition
Authors: Thomas Nechyba
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