Let us denote Ben’s daily hours of work by H, and his hours of leisure by N = 24 − H. Suppose that Ben’s only source of income is wages for hours worked. He derives utility from leisure, N, and from the consumption of a composite good, Y. The price of Y is 1. Ben’s utility function is U(Y, N) = ln(Y) + ln(N). (a) Suppose the wage rate is $60 per hour. Write down Ben’s constraint with Y and N as the choice variables.
Let us denote Ben’s daily hours of work by H, and his hours of leisure by N = 24 − H. Suppose that Ben’s only source of income is wages for hours worked. He derives utility from leisure, N, and from the consumption of a composite good, Y. The price of Y is 1. Ben’s utility function is U(Y, N) = ln(Y) + ln(N). (a) Suppose the wage rate is $60 per hour. Write down Ben’s constraint with Y and N as the choice variables.
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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Let us denote Ben’s daily hours of work by H, and his hours of leisure by N = 24 − H. Suppose that Ben’s only source of income is wages for hours worked. He derives utility from leisure, N, and from the consumption of a composite good, Y. The price of Y is 1. Ben’s utility function is U(Y, N) = ln(Y) + ln(N). (a) Suppose the wage rate is $60 per hour. Write down Ben’s constraint with Y and N as the choice variables.
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