Question
Suppose consumer utility function for the one-period model is given by U(c,l)=c+Bl where w is greater that B which is greater than 0. profit=0 and
Suppose consumer utility function for the one-period model is given by U(c,l)=c+Bl
where w is greater that B which is greater than 0. profit=0 and T=0
(a) What assumptions about the utility function are violated by this utility function.
(b) Write down consumer maximization problem
(c) Solve for equilibrium c and l given w. Graphically illustrate the equilibrium
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The Great Divide Unequal Societies And What We Can Do About Them
Authors: Joseph E Stiglitz
1st Edition
0393352188, 9780393352184
