a. Draw the daily budget constraint of a consumer who has 24 hours in their day, and can earn a wage of $20 an hour for every hour chosen to work (and not consumed as leisure). They can spend their income on a composite good c that costs $8 per unit. This consumer also receives $100 from their supportive parents every day. b. If this consumer's utility function for leisure (r) and c is given by U (r, c) = rc, calculate this consumer's optimal bundle.

a. Draw the daily budget constraint of a consumer who has 24 hours in their day, and can earn a wage of $20 an hour for every hour chosen to work (and not consumed as leisure). They can spend their income on a composite good c that costs $8 per unit. This consumer also receives $100 from their supportive parents every day. b. If this consumer's utility function for leisure (r) and c is given by U (r, c) = rc, calculate this consumer's optimal bundle.

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Consumer Choice Theory

Section6.A: Indifference Curve Analysis

Problem 1SQP

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