Question
Douglas Cobb has preferences over leisure, , and consumption, , described by the utility function: (,)=^ ^, with and 0 < <1and 0 < <1.
Douglas Cobb has preferences over leisure, , and consumption, , described by the utility function: (,)=^ ^, with and 0<<1and 0<<1.
Cobb's time endowment is , Cobb's non-labor income is , and Cobb's wage per unit of time worked is ,
a.) Find Cobb's reservation wage AND b.) Show that Cobb's labor supply function is =( /(+) ) (/ (+) ) (/), for values of greater than or equal to Cobb's reservation wage.
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Introduction to Behavioral Economics
Authors: David R. Just
1st edition
0470596228, 978-0470596227
