
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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![Consider a closed economy with consumption, production, and government. The representative consumer always
desires a consumption bundle where the quantities of consumption and leisure are such that C=al and a = 1.
Show the following on your answer sheet.
[1] Suppose that w = 0.75, profit = 8, and T= 6. Determine the consumer's optimal choice of consumption and leisure,
showing every step of your calculation.
[2] Illustrate the consumer's equilibrium from part [1] in a diagram.](https://content.bartleby.com/qna-images/question/e28dde66-c422-4bb5-be2e-b857aa636946/780eaf96-e93c-42b2-8232-e5b484ecc7bd/f7fp4zr_thumbnail.png)
Transcribed Image Text:Consider a closed economy with consumption, production, and government. The representative consumer always
desires a consumption bundle where the quantities of consumption and leisure are such that C=al and a = 1.
Show the following on your answer sheet.
[1] Suppose that w = 0.75, profit = 8, and T= 6. Determine the consumer's optimal choice of consumption and leisure,
showing every step of your calculation.
[2] Illustrate the consumer's equilibrium from part [1] in a diagram.
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