Find shellys optimal amount of consumption and leisure

Assignment Help Business Economics
Reference no: EM13851893

Shellys preferences for consumption and leisure can be expressed as U(C, L) = (C − 200)(L − 80) (1) This utility function implies that Shellys marginal utility of leisure is C − 200 and her marginal utility of consumption is L − 80. There are 168 hours in the week available to split between work and leisure. Shelly earns $5 per hour after taxes. She also receives $320 worth of welfare benefits each week regardless of how much she works. 5.1 Graph Shellys budget line. 5.2 Write down the budget equation. 5.3 Find Shellys optimal amount of consumption and leisure. 5.4 What is Shellys marginal rate of substitution? 5.5 What is Shellys reservation wage?

Reference no: EM13851893

Questions Cloud

Utility function-how much of each good will he demand : Edmund has the utility function U(x, y) = 2xy + 1. The prices of x and y are both $1 and Edmund has an income of $20. How much of each good will he demand? A tax is placed on x so that it now costs Edmund $2 while his income and the price of y stay t..
Utility function-demand for both goods double : Max has the utility function U(x, y) = x(y + 1). The price of x is $2 and the price of y is $1. Max’s Income is $11. How much x does Max demand? How much y? If his income doubles and prices stay unchanged, will Max’s demand for both goods double?
Marginal product of capital is decreasing : What does it mean that marginal product of capital is decreasing? Show the marginal products are diminishing in the cobb-douglas case. Determination of steady state capital per worker consider the steady state capital per worker k*, how is k* affecte..
Growth without diminishing productivity of capital : Growth without diminishing productivity of capital suppose that the production function is Y=AK. What is the condition for the growth rate of capital per worker, ?what does the s*(y/k) curve look like? Discuss how your results relate to diminishing p..
Find shellys optimal amount of consumption and leisure : Shellys preferences for consumption and leisure can be expressed as U(C, L) = (C − 200)(L − 80) (1) This utility function implies that Shellys marginal utility of leisure is C − 200 and her marginal utility of consumption is L − 80. Find Shellys opti..
What is information asymmetry and example : What is information asymmetry and example? What is moral hazard and example? What is adverse selection and example?
A framework for ethical decision making : A Framework for Ethical Decision Making
Draw PPF-Budget Constraint-Indifference Curve diagram : Home (H) and Foreign (F) produce autos and shirts using capital (K) and labor (L). Autos are capital intensive relative to shirts. Draw a PPF-Budget Constraint-Indifference Curve diagram for each country that shows the autarky (no-trade) equilibrium,..

Reviews

Write a Review

 

Business Economics Questions & Answers

  Aggregate demand induced recession

Compare the effects of an aggregate-demand-induced recession with an aggregate-supply-induced recession.

  Determine the cost data for each business

analyze the graphs and briefly describe the similarities and differences between the short and long run operation of each business

  Country could increase national saving rate and therefore

In the post war period, a country could increase the national saving rate and therefore: The depreciation rate in United State is about 4% and population growth rate is 0.9% in 2012 and the technology growth rate is 2.1%. According to the Solow model..

  About the state of economy and future productivity growth

If you were Chairperson of the Federal Reserve. Show each of the following shocks on an IS-MP diagram.  Consumers become pessimistic about the state of the economy and future productivity growth. Improvements in the information technology increase pr..

  Marginal benefit of drinking

While drinking coffee, you believe that the marginal benefit of drinking one more cup is greater than the marginal cost of that cup. You then conclude that:

  Rivalry is especial destructive to probability

Rivalry is especial destructive to probability if:

  The profits of non-merged firms and to product price

For all problems consider a market containing four identical firms, each of which makes an identical product. The inverse demand for this product is P = 100?Q, where P is price and Q is aggregate output. The production costs for firms 1, 2, and 3 are..

  Basic three sector model and instead of assuming

If we modify our basic three sector model and instead of assuming that taxes are autonomous or fixed in amount (the Tx = Txo assumption) now assume that taxes are a positive function of income, will this modification have the effect of increasing, de..

  Distribution of wealth to the distribution of income

When comparing the distribution of wealth to the distribution of income, it can be noted that

  Interest rates to rise when nominal money supply is fixed

The president of the United States announces in press conferences in a press conference that he will fight the higher inflation rate with a new anti-inflation program. Predict what will happen to interest rates if the public believe him. Why should a..

  Average time in the system

Illustrate what is the average time in the system. Illustrate what is the probability there are more than three cars in the system.

  How would the effect of monetary policy on aggregate demand

How would the effect of monetary policy on aggregate demand change if there were more adjustable rate mortgages than fixed rate mortgages?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd