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Consider an economy with one consumer and one firm. The firm produces the output C from the labour L according to the production function f(L)=L³/182. The consumer provides labour to the firm and consumes the good C. The consumer can work a maximum of 18 hours a day. Her utility function is u(Le,C)=2C+Le where Le=18-L is her leisure time. What is the time L the consumer should work at the Pareto efficient allocation? a. None of the other answers. O b. L=0 O c. L=9 O d. L=3 e. L=6

Consider an economy with one consumer and one firm. The firm produces the output C from the labour L according to the production function f(L)=L³/182. The consumer provides labour to the firm and consumes the good C. The consumer can work a maximum of 18 hours a day. Her utility function is u(Le,C)=2C+Le where Le=18-L is her leisure time. What is the time L the consumer should work at the Pareto efficient allocation? a. None of the other answers. O b. L=0 O c. L=9 O d. L=3 e. L=6

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider an economy with one consumer and one firm. The firm produces the output C from the labour L according to the production function f(L)=L/182. The consumer provides labour to the firm and consumes the good C. The consumer can work a maximum of 18 hours a day. Her utility function is u(Le,C)=2C+Le where Le=18-L is her leisure time. What is the time L the consumer should work at the Pareto efficient allocation? None of the other answers. O a. Ob. L=0 O c. L=9 O d. L=3 O e. L=6 thomnt
Transcribed Image Text:Consider an economy with one consumer and one firm. The firm produces the output C from the labour L according to the production function f(L)=L/182. The consumer provides labour to the firm and consumes the good C. The consumer can work a maximum of 18 hours a day. Her utility function is u(Le,C)=2C+Le where Le=18-L is her leisure time. What is the time L the consumer should work at the Pareto efficient allocation? None of the other answers. O a. Ob. L=0 O c. L=9 O d. L=3 O e. L=6 thomnt
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