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An individual has utility function . The person has no non-labor income and 100 hours per week to use on leisure or work. Suppose the
An individual has utility function . The person has no non-labor income and 100 hours per week to use on leisure or work. Suppose the wage is $20 per hour.
a. How many hours per week will this person work?
b. The wage increases from $20 to $25. How much will labor supply change? What is the substitution and income effect?
The income effect and sub effect will cancel each other out at CL (constant)
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