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Steven has non-labor income each week of $500. He can work up to 100 hours per week for an hourly wage of $10 per hour. His utility for recreation (R) and consumption (C) is given by U(R, C) = 2R2C. What is Steven’s reservation wage if the price of consumption is unity? (a) $30 (b) $40 (c) $50 (d) $60 (e) None of the above

Steven has non-labor income each week of $500. He can work up to 100 hours per week for an hourly wage of $10 per hour. His utility for recreation (R) and consumption (C) is given by U(R, C) = 2R2C. What is Steven’s reservation wage if the price of consumption is unity? (a) $30 (b) $40 (c) $50 (d) $60 (e) None of the above

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter7: Consumer Choice And Elasticity
Section: Chapter Questions
Problem 2CQ
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(5) Steven has non-labor income each week of $500. He can work up to 100 hours per week for
an hourly wage of $10 per hour. His utility for recreation (R) and consumption (C) is given by
U(R, C) = 2R2C. What is Steven’s reservation wage if the price of consumption is unity?
(a) $30
(b) $40
(c) $50
(d) $60
(e) None of the above

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