2. Suppose Jill derives utility from not only consuming goods, but also from enjoying leisure time. Let her utility function be defined as follows: U=C.25.R.75 where C is a consumption good that can be bought at a price of $1 and R is hours of leisure (relaxation) consumed per day. There are 24 hours in a day and leisure is defined as time spent not working. Jill has a job that pays $w per hour, a trust fund that pays her $M per day, and she can work any number of hours per day, L, she desires. C, consumption good; R, Leisure (relaxation); L, labor M, non-wage income; w, wage rate. a. Derive her labor supply function? b. Assume M = $100, at what wage is her quantity supplied of hours = 0?

2. Suppose Jill derives utility from not only consuming goods, but also from enjoying leisure time. Let her utility function be defined as follows: U=C.25.R.75 where C is a consumption good that can be bought at a price of $1 and R is hours of leisure (relaxation) consumed per day. There are 24 hours in a day and leisure is defined as time spent not working. Jill has a job that pays $w per hour, a trust fund that pays her $M per day, and she can work any number of hours per day, L, she desires. C, consumption good; R, Leisure (relaxation); L, labor M, non-wage income; w, wage rate. a. Derive her labor supply function? b. Assume M = $100, at what wage is her quantity supplied of hours = 0?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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could you answer part e please