The weekly preferences over consumption (C) and leisure (L) are defined by u(C, L) = √C + 3√L. The person receives a weekly allowance of m from The hourly wage is $18 per hour, and the person can work up to 50 hours each week (T = z + L = 50), where z is the number of hours spent working). a)How many hours will the person work if her allowance is m= $450 per week b) What is the smallest allowance m for which the person will stop working altogether (z∗ = 0) for a wage of w = 18?
The weekly preferences over consumption (C) and leisure (L) are defined by u(C, L) = √C + 3√L. The person receives a weekly allowance of m from The hourly wage is $18 per hour, and the person can work up to 50 hours each week (T = z + L = 50), where z is the number of hours spent working). a)How many hours will the person work if her allowance is m= $450 per week b) What is the smallest allowance m for which the person will stop working altogether (z∗ = 0) for a wage of w = 18?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The weekly preferences over consumption (C) and leisure
(L) are defined by u(C, L) = √C + 3√L. The person receives a weekly allowance of m from The hourly wage is $18 per hour, and the person can work up to
50 hours each week (T = z + L = 50), where z is the number of hours spent working).
a)How many hours will the person work if her allowance is m= $450 per week
b) What is the smallest allowance m for which the person will stop
working altogether (z∗ = 0) for a wage of w = 18?
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