Suppose that the utility function of an individual is given by U=Y/2L2, where Y is real income and Lis leisure time. The marginal utilities are MUL=0.5Y2L-1/2 and MUy=0.5Y L2 There are 15 hours available for labour/leisurer the current wage rate is $20 per hour, and the price index for real income is 5. Assume that there is no non-labour income. Show minimal calculation work. a) Determine the budget constraint function? b) Determine the optimal relationship between income and labour hours? C) Calculate the optimal amount of labour hours? ) Calculate the optimal amount of leisure hours? ) Calculate the income level of the individual at the optimal condition? Calculate the utility level for the individual at the optimal condition?

Suppose that the utility function of an individual is given by U=Y/2L2, where Y is real income and Lis leisure time. The marginal utilities are MUL=0.5Y2L-1/2 and MUy=0.5Y L2 There are 15 hours available for labour/leisurer the current wage rate is $20 per hour, and the price index for real income is 5. Assume that there is no non-labour income. Show minimal calculation work. a) Determine the budget constraint function? b) Determine the optimal relationship between income and labour hours? C) Calculate the optimal amount of labour hours? ) Calculate the optimal amount of leisure hours? ) Calculate the income level of the individual at the optimal condition? Calculate the utility level for the individual at the optimal condition?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Can you please help solve question 10 a,b and c please show full working so I can compare it to my own work Thank you
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