Would the worker continue to be a member of the labor

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Consider a family that ranks combinations of household production time (N) and purchased goods and services (Y) according to the formula: U=NY. Suppose the maximum time available in a day is 16 hours, the wage rate is $4 per hour and the family receives $20 per day in non- labor income. Due to a recession the husband loses his job. Assuming that U =0.5, would an hour spent in the labor force searching for a job make the husband better off or worse off? Would the worker continue to be a member of the labor force under these conditions? If not, how would he be categorized?

Reference no: EM13182676

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