For Miranda, catching fish is not just a profitable activity, it is also her only viable source of food. She derives utility from consuming fish q as well as leisure time r, by the function U (q, r) = √gr Again, let p denote the price of fish and let w = 1 be the hourly wage that Miranda earns from working. She has a total of l = 24 hours per day to divide between labor and leisure, so that l + r = 24. a) Suppose that Miranda's expenditure on fish comes entirely from her wages pq = wł. Rewrite this condition as a budget constraint. What is the "price" of leisure and what is Miranda's "income" I? b) Write Miranda's utility maximization problem and state the first order conditions. (c) Find Miranda's demand for fish qd(p) and leisure r(p), and her indirect utility v(p)
For Miranda, catching fish is not just a profitable activity, it is also her only viable source of food. She derives utility from consuming fish q as well as leisure time r, by the function
U (q, r) = √gr
Again, let p denote the
a) Suppose that Miranda's expenditure on fish comes entirely from her wages pq = wł. Rewrite this condition as a budget constraint. What is the "price" of leisure and what is Miranda's "income" I?
b) Write Miranda's utility maximization problem and state the first order conditions.
(c) Find Miranda's
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