. How much utility does the individual receive if she consumes C = 100 and works h = 7 hours? b. Calculate the rate at which the individual is willing to sacrifice an additional leisure hour when she is already working 4 hours. c. What is this individual’s optimal amount of consumption and leisure?
Assume an individual has a utility function of this form
U(C, L) = 20 + 4(C*L)1/2
This utility function implies that the individual’s
a. How much utility does the individual receive if she consumes C = 100 and works h = 7 hours?
b. Calculate the rate at which the individual is willing to sacrifice an additional leisure hour when she is already working 4 hours.
c. What is this individual’s optimal amount of consumption and leisure?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
