A household has an endowment of 1 unit of time .The household maximises its utility u = In(c) + bln(1 – 1), where e denotes consumption and le [0, 1] denotes time spent working. It finances its consumption from labour income wl, where w is the market wage rate per unit of labour time. If the market wage rate goes up, then equilibrium labour supply of the houschold a) Increases b) Decreases c) Remains constant d) Changes in ambiguous manner

A household has an endowment of 1 unit of time .The household maximises its utility u = In(c) + bln(1 – 1), where e denotes consumption and le [0, 1] denotes time spent working. It finances its consumption from labour income wl, where w is the market wage rate per unit of labour time. If the market wage rate goes up, then equilibrium labour supply of the houschold a) Increases b) Decreases c) Remains constant d) Changes in ambiguous manner

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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