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Daniela is a university student, managing to earn some income with daily hours of Mathematics explanations at $5 an hour. Its utility function between consumption
Daniela is a university student, managing to earn some income with daily hours of Mathematics explanations at $5 an hour. Its utility function between consumption (c) and leisure (La) is: U = cLa + La - 30. Daniela reserves 6 hours for university tasks and 8 hours for sleep, so she has 10 hours a day to spend on work or leisure.
a) Derive Daniela's demand function for work.
b) What are the implications of imposing a 20% tax on Daniela's earnings? Presents the calculus that support your answer.
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