Question
Dana is endowed with 8760 hours and $2500 in non-labor income per year. She earns $100/hour. Her utility function over leisure (L) and consumption (C)
- Dana is endowed with 8760 hours and $2500 in non-labor income per year. She earns $100/hour. Her utility function over leisure (L) and consumption (C) is:
U(L,C) = L2C
1. What is the value of her endowment each year?
2. What is her optimal choice of leisure, consumption and hours of work? Round to the nearest dollar/hour.
3. What is her reservation wage? Round to the nearest cent.
4.Illustrate your answer in a diagram including the budget constraint and the indifference curve corresponding to his optimal choice.
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Reimagining Capitalism In A World On Fire
Authors: Rebecca Henderson
1st Edition
1541730151, 9781541730151
