Q1 a (- Hongbo has preferences over leisure (L) and income (Y) that can be described by the following utility function: U(Y, L) = (Y — 200) (L – 80) Each week Hongbo receives $320 in non-labour income and has 168 hours to divide between work and leisure. Every hour he works he earns $10. What is Hongbo's optimal amount of income and labour? Draw a diagram of his budget set and optimal consumption bundle. Be sure to carefully label all important points.

Q1 a (- Hongbo has preferences over leisure (L) and income (Y) that can be described by the following utility function: U(Y, L) = (Y — 200) (L – 80) Each week Hongbo receives $320 in non-labour income and has 168 hours to divide between work and leisure. Every hour he works he earns $10. What is Hongbo's optimal amount of income and labour? Draw a diagram of his budget set and optimal consumption bundle. Be sure to carefully label all important points.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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