A worker has a total time endowment of 1, which he allocates between leisure l and labor
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Question:
A worker has a total time endowment of 1, which he allocates between
leisure l and labor n. He faces a wage rate w > 0 in the labor market.
He derives utility from both consumption
c and leisure l according to
the following function U(c, l) =
c + l. Use the Lagrange method
to fifind his optimal choices l, n , and c . In particular, how does his
labor supply depend on his wage rate w?
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