Angela has utility over consumption (C) and leisure (L) that is given byU(C,L)= (C0.5)+6(L0.5)where consumption is measured in dollars and leisure is measured in hours. Each week,Angela has 168 hours to devote to either leisure or working.Suppose Angela is offered a job that pays $10 per hour (such that, if she were to work everyhour of the week, she would earn $3,024). If Angela has no income besides that which sheearns from working, her budget constraint over consumption and leisure isC +18L = 3,024Solve for the levels of consumption and leisure that maximize Angela's utility subject to herbudget constraint. Angela's utility-maximizing consumption is $0168utility-maximizing number of leisure hours isin the blanks, and please round to the nearest whole numbers if necessary.)Herhours. (Enter only numbers

The consumer decides to have a decision among the leisure and consumption. If the consumer would…

Solve for the levels of consumption and leisure that maximize Angela's utility subject to her budget constraint. Angela's utility-maximizing consumption is $ 0 Her 168 utility-maximizing number of leisure hours is in the blanks, and please round to the nearest whole numbers if necessary.) hours. (Enter only numbers

Solve for the levels of consumption and leisure that maximize Angela's utility subject to her budget constraint. Angela's utility-maximizing consumption is $ 0 Her 168 utility-maximizing number of leisure hours is in the blanks, and please round to the nearest whole numbers if necessary.) hours. (Enter only numbers

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Jack's marginal utility of consumption is MUc = L - 6, and the marginal utility of leisure is MUL=C-40. Jack does not have any nonlabor income, i.e., V = 0. Jack faces a $48 an hour wage rate. Jack's total number of hours available per week is 150. What is Jack's optimal choice of consumption? (calculate to 2 decimal places)
2. Suppose Jill derives utility from not only consuming goods, but also from enjoying leisure time. Let her utility function be defined as follows: U=C.25.R.75 where C is a consumption good that can be bought at a price of $1 and R is hours of leisure (relaxation) consumed per day. There are 24 hours in a day and leisure is defined as time spent not working. Jill has a job that pays $w per hour, a trust fund that pays her $M per day, and she can work any number of hours per day, L, she desires. C, consumption good; R, Leisure (relaxation); L, labor M, non-wage income; w, wage rate. a. Derive her labor supply function? b. Assume M = $100, at what wage is her quantity supplied of hours = 0?
Rich's Opportunities. Rich has no nonlabor income, and suppose the price of consumption is $1 per unit. Rich earns $15 per hour, and he has 16 hours in the day to allocate between working and leisure time. The figure be depicts his budget line. consumption (units/day) 240 210 180 150 120 90 60 30 0. 21 4. 6. 8. 10 12 14 16 leisure (hours/day) Rich is thrilled to learn that his folks will give him a $10 daily allowance starting tomorrow. What happens to Rich's opportunities tomorrow? O a. Rich's endowment point shifts left $10. Ob. His budget line shifts up 10 units of consumption per day. O c. The slope of Rich's budget line increases (in absolute value) $10 per day. O d. The slope of Rich's budget line decreases (in absolute value) $10 per hour.
Terry attends college and works part-time in a drug store. She can work up to 40 hours per week and is paid $9 per hour. With her schoolwork and other responsibilities, she only has 40 hours per week total to devote to work and leisure. The following table shows her utility from different levels of leisure and income. Hours of Leisure Total Utility from Leisure Marginal Utility of Leisure Work Hours Income Total Utility from Income Marginal Utility from Income 5 18 5 45 35 10 34 10 90 59 15 48 15 135 77 20 56 20 180 86 25 60 25 225 92 30 65 30 270 98 35 69 35 315 103 40 72 40 360 107 Terry decides to decrease her work hours from 20 to 10. 8. What would be marginal utility loss from less income?
Amy is in school learning to weld. She spends long hours studying (and drinking coffee), and long hours welding in the hot, dirty shop (and therefore takes frequent showers). Amy has $70.00 a month to spend on the soap and coffee she needs to function properly. Draw Amy's budget constraint, assuming the soap costs $3.50 per bottle, and the coffee costs $14.00 a pound. Also assume that Amy spends all of her money on either soap or coffee or some combination of both. Every time Amy buys a pound of coffee, she is giving up the opportunity to buy… Quantity of SoapQuantity of Coffee0123456789101112131415161718192001234567891011121314151617181920 Every time Amy buys a pound of coffee, she is giving up the opportunity to buy 4 bottles of soap 10 bottles of soap 8 bottles of soap 2 bottles of soap 6 bottles of soap
Terry attends college and works part-time in a drug store. She can work up to 40 hours each week and is paid $9 per hour. The following table shows her utility from different levels of leisure and income. Refer to the attached picture for the table. 1. Fill in the Marginal Utility columns above. 2. What will be Terry’s total utility from both leisure and income when working 20 hours per week?
2nd attempt See Hint A consumer faces a tradeoff between labor (L) and leisure (R). She consumes a composite good (C). When the consumer works, she earns an hourly wage of $15.00, and she spends a maximum of 24 hours on labor and leisure, but she chooses to work 10.00 hours. Whatever time she does not spend working, she spends on leisure. She starts with an initial endowment of 11.00 units of the composite good, which she can buy and sell freely at a market price of $4.00. Given this information, what is the consumer's real wage? $ 194
The graph given below indicates Marshall's marginal utility for two products, A and B. Marginal utility 24 20 16 12 8 4 0 (1) Quantity 1 2 3 4 5 6 2 (2) Product A MU 4 Quantity of A: Quantity of B: 6 8 Quantity per period (3) Product A (4) MU per $ Product B (at $2) MU 10 Product A Product B 12 a) From the graph above, complete columns 2 and 4 of the table above. Round your answers to whole numbers. b) If the price of both products is $1, what quantity of each good would Marshall purchase if his budget was $8? Quantity of A: Quantity of B: c) Suppose that the price of product A increases to $2. Complete column 3 of table above. d) If Marshall's budget remained the same, what quantities of each good would he now purchase?
John works in a shoe factory. He can work as many hours per day as he wishes at a wage rate w. Let C be the amount of dollars he spends on consumer goods and R. be the number of hours of leisure that he chooses. John's preferences are represented by U(C, R) = CR utility function Question 2 Part a John earns $8 an hour and has 18 hours per day to devote to labor or leisure, and he has $16 of nonlabor income per day. Draw John's indifference curves, budget constraints and solve for his optimal consumption and leisure choices.
2. Utility maximization - Trading off labor and leisure The indifference curves on the following graph show Amy's preferences for leisure and consumption for increasing levels of utility, such that her utility increases in both consumption and leisure. Assuming that Amy spends 68 hours each week sleeping, she has a maximum of 100 hours available to her for leisure if she does not work at all. Initially, she works 45 hours (and thus has 55 hours of leisure) and earns $250 per week. Use the grey point (star symbol) to indicate Amy's initial leisure/consumption bundle. Dashed drop lines will automatically extend to both axes. CONSUMPTION (Dollars per week) 1000 900 800 700 600 500 400 300 200 100 0 0 + 10 20 30 40 50 60 70 80 LEISURE (Hours per week) 90 U3 100 110 Initial bundle + $200 Unemployment Benefits Equivalent Bundle, $100 Unemployment Benefits Equivalent Bundle ?
Only typed answer Oscar makes purchases of an existing product (X) such that the marginal utility of the last unit he consumes is 10 utils and the price is $5. He also tries a new product (Y) and the marginal utility of the last unit he consumes is 8 utils and the price is $1. The equal marginal principle suggests that Oscar should Multiple Choice increase his consumption of product X and decrease his consumption of product Y. increase
part 3 4 5 Suppose Joan has a fixed income of 1000 and spends the entire income on commodity X and Y. The prices of commodity X and Y are 5 and 10 respectively.(i) Derive the consumer’s budget equation and sketch the line of this equation plotting Y on the vertical axis and X on the horizontal axis.(ii) What is the slope of the budget line (i) and what does it mean?(iii) Assuming income and price of X remain the same, show the effect of a 50 percent reduction in the price of Y on the consumer’s budget line.(iv) Show the effect of a 100 percent increase in income and a 50 percent reduction in prices on the consumer’s budget line.(v) If Joan’s U = X2Y2find the optimal bundle of X and Y that maximises Joan’s utility.