Question
Consider an individual that has utility as a function of Goods and Leisure: U = 40 G.55 L.45 The individual has non-wage income of $400
Consider an individual that has utility as a function of Goods and Leisure:
U = 40 G.55 L.45
The individual has non-wage income of $400 and has 18 hours in the day that can be devoted to either work or leisure. The price of goods is $10/unit.
a) Explain what the reservation wage measures? What is the reservation wage of this individual?
b) What is the income and utility of this individual if the wage is $30/hour?
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Theories Of Value From Adam Smith To Piero Sraffa
Authors: Ajit Sinha
2nd Edition
0429807716, 9780429807718
