The representative consumer has the preferences such that she wants to consume the consumption good, c, and the leisure, I, in fixed proportions: c=0.51. She has h hours of time available which she can allocate between work and leisure. For each hour of work, she earns w units of consumption good. She also earns a units of consumptions goods as dividend (profit) income. She has to pay T units of goods to the government as a lump-sum tax. Solve for the c and I that maximize the utility of the consumer.

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Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.