Question
Given Adam's utility function as U = In(C) + In(1) where C and I represent Bananas and leisure respectively. The wage rate is $5 per
Given Adam's utility function as U = In(C) + In(1) where C and I represent Bananas and leisure respectively. The wage rate is $5 per hour and the price of bananas is $1.
(a) Calculate how many hours per day (24 hours). Adam should work to maximize his utility.
(b) Now, suppose Adam wins a lottery that gives him $100. calculate how many hours per day Adam should work to maximize his utility
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Intermediate accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
7th edition
978-0077614041, 9780077446475, 77614046, 007744647X, 77647092, 978-0077647094
