1. -- ) and leisure ( L), U = CL². The wage rate is $20 per hour, the price of consumption is $10 per unit, and the consumer's non-labor income is $60. The time endowment of the consumer is 24 hours. I Consider a consumer who has the following utility function of consumption (C (1).( ) What's the utility-maximizing choice of consumption and leisure? (2).( Show that at that choice, the marginal rate of substitution between consumption and leisure is equal to the real wage.
1. -- ) and leisure ( L), U = CL². The wage rate is $20 per hour, the price of consumption is $10 per unit, and the consumer's non-labor income is $60. The time endowment of the consumer is 24 hours. I Consider a consumer who has the following utility function of consumption (C (1).( ) What's the utility-maximizing choice of consumption and leisure? (2).( Show that at that choice, the marginal rate of substitution between consumption and leisure is equal to the real wage.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![I Consider a consumer who has the following utility function of consumption ( C
1. --
) and leisure ( L ), U = CL?. The wage rate is $20 per hour, the price of consumption is
$10 per unit, and the consumer's non-labor income is $60. The time endowment of the
consumer is 24 hours.
(1).(
) What's the utility-maximizing choice of consumption and leisure?
(2).(
Show that at that choice, the marginal rate of substitution between
consumption and leisure is equal to the real wage.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F454a2464-9c96-48c6-aba8-30b2ed22d997%2F65a3b18f-0023-4d67-83c7-062a39ad522b%2Fkr2dccb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:I Consider a consumer who has the following utility function of consumption ( C
1. --
) and leisure ( L ), U = CL?. The wage rate is $20 per hour, the price of consumption is
$10 per unit, and the consumer's non-labor income is $60. The time endowment of the
consumer is 24 hours.
(1).(
) What's the utility-maximizing choice of consumption and leisure?
(2).(
Show that at that choice, the marginal rate of substitution between
consumption and leisure is equal to the real wage.
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