QUESTIONS Question 1. (Video Games). Recent research by economists suggests that part of the decline in hours worked by young males between the ages 21 and 30 over the period 2000 to 2015 may be due to innovations in recreational computing and video games. This leisure good is disproportionately favored by young men relative to women and older men. Imagine the situation of young males who are supported by some combi- nation of their parents, significant others, or the government to the tune of i units of consumption, c. These males can either go to work if they choose, and earn the wage rate w, or stay at home and play video games. A male 1 has one unit of time that can be split between working, l, and leisure, 1 – 1. Time in the market is indivisible; that is, the male either works 7 hours (a fixed amount) or none so that 1 = {0,1}. The male plays online video games, which are free. The videos games are mixed with leisure to generate utility. In particular, suppose that a young male's utility function is given by In(c) + - In[knº + (1 − k)(1 − 1)º], with 0 < 0 < 1 and p < 0, (1 - 0)λ. ρ where n is the number of video games that the person plays. Note that p is negative. The utility generated from video games is distributed across males according to the parameter >> 0 that has the cumulative distribution function, H(X). 1. Formulate the young male's decision to work or not. 2. What fraction of young males, μ, will work? 3. How is the employment of young males influenced by the wage, w? 4. How is the employment of young males influenced by their outside income, i?
QUESTIONS Question 1. (Video Games). Recent research by economists suggests that part of the decline in hours worked by young males between the ages 21 and 30 over the period 2000 to 2015 may be due to innovations in recreational computing and video games. This leisure good is disproportionately favored by young men relative to women and older men. Imagine the situation of young males who are supported by some combi- nation of their parents, significant others, or the government to the tune of i units of consumption, c. These males can either go to work if they choose, and earn the wage rate w, or stay at home and play video games. A male 1 has one unit of time that can be split between working, l, and leisure, 1 – 1. Time in the market is indivisible; that is, the male either works 7 hours (a fixed amount) or none so that 1 = {0,1}. The male plays online video games, which are free. The videos games are mixed with leisure to generate utility. In particular, suppose that a young male's utility function is given by In(c) + - In[knº + (1 − k)(1 − 1)º], with 0 < 0 < 1 and p < 0, (1 - 0)λ. ρ where n is the number of video games that the person plays. Note that p is negative. The utility generated from video games is distributed across males according to the parameter >> 0 that has the cumulative distribution function, H(X). 1. Formulate the young male's decision to work or not. 2. What fraction of young males, μ, will work? 3. How is the employment of young males influenced by the wage, w? 4. How is the employment of young males influenced by their outside income, i?
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter17: Production And Growth
Section: Chapter Questions
Problem 8PA
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![QUESTIONS
Question 1. (Video Games). Recent research by economists suggests that
part of the decline in hours worked by young males between the ages 21 and
30 over the period 2000 to 2015 may be due to innovations in recreational
computing and video games. This leisure good is disproportionately favored
by young men relative to women and older men.
Imagine the situation of young males who are supported by some combi-
nation of their parents, significant others, or the government to the tune of
i units of consumption, c. These males can either go to work if they choose,
and earn the wage rate w, or stay at home and play video games. A male
1
has one unit of time that can be split between working, l, and leisure, 1 – 1.
Time in the market is indivisible; that is, the male either works 7 hours (a
fixed amount) or none so that 1 = {0,1}. The male plays online video games,
which are free. The videos games are mixed with leisure to generate utility.
In particular, suppose that a young male's utility function is given by
In(c) +
- In[knº + (1 − k)(1 − 1)º], with 0 < 0 < 1 and p < 0,
(1 - 0)λ.
ρ
where n is the number of video games that the person plays. Note that
p is negative. The utility generated from video games is distributed across
males according to the parameter >> 0 that has the cumulative distribution
function, H(X).
1. Formulate the young male's decision to work or not.
2. What fraction of young males, μ, will work?
3. How is the employment of young males influenced by the wage, w?
4. How is the employment of young males influenced by their outside
income, i?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa82ab235-0403-49ff-b89c-b564bdf9f108%2F945bb603-71da-4832-81c8-b12ba4410dd1%2Fjyjnk9m_processed.png&w=3840&q=75)
Transcribed Image Text:QUESTIONS
Question 1. (Video Games). Recent research by economists suggests that
part of the decline in hours worked by young males between the ages 21 and
30 over the period 2000 to 2015 may be due to innovations in recreational
computing and video games. This leisure good is disproportionately favored
by young men relative to women and older men.
Imagine the situation of young males who are supported by some combi-
nation of their parents, significant others, or the government to the tune of
i units of consumption, c. These males can either go to work if they choose,
and earn the wage rate w, or stay at home and play video games. A male
1
has one unit of time that can be split between working, l, and leisure, 1 – 1.
Time in the market is indivisible; that is, the male either works 7 hours (a
fixed amount) or none so that 1 = {0,1}. The male plays online video games,
which are free. The videos games are mixed with leisure to generate utility.
In particular, suppose that a young male's utility function is given by
In(c) +
- In[knº + (1 − k)(1 − 1)º], with 0 < 0 < 1 and p < 0,
(1 - 0)λ.
ρ
where n is the number of video games that the person plays. Note that
p is negative. The utility generated from video games is distributed across
males according to the parameter >> 0 that has the cumulative distribution
function, H(X).
1. Formulate the young male's decision to work or not.
2. What fraction of young males, μ, will work?
3. How is the employment of young males influenced by the wage, w?
4. How is the employment of young males influenced by their outside
income, i?
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