she maximises subject to a constraint: C = w(1 – t)(h – 1) + T 1, C, t and T are wages, hours of time available, leisure, consumption, tax nd income. The production function for this economy is given by Y = C +G = A(h – 1)'/2 at h = 1, A = 1 and that the government has a balanced budget. the equilibrium by matching the Marginal Rate of Substitution to the Mar of Transformation and then substitute into the constraint. Also take nt that profits are non-zero for this setup.

she maximises subject to a constraint: C = w(1 – t)(h – 1) + T 1, C, t and T are wages, hours of time available, leisure, consumption, tax nd income. The production function for this economy is given by Y = C +G = A(h – 1)'/2 at h = 1, A = 1 and that the government has a balanced budget. the equilibrium by matching the Marginal Rate of Substitution to the Mar of Transformation and then substitute into the constraint. Also take nt that profits are non-zero for this setup.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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