Amanda faces a tradeoff between labor L and leisure R. She consumes a composite good C. When she works, she earns an hourly wage of $19, and she has a maximum of twenty four hours to spend on labor and leisure together. Whatever time she does not spend working, she spends on leisure. Amanda starts with an initial endowment of 27 units of the composite good, which she can buy and sell freely at a market price of $6. Given this information, what is Amanda's full or implicit income? Ans/ $ _(numeric). N

Amanda faces a tradeoff between labor L and leisure R. She consumes a composite good C. When she works, she earns an hourly wage of $19, and she has a maximum of twenty four hours to spend on labor and leisure together. Whatever time she does not spend working, she spends on leisure. Amanda starts with an initial endowment of 27 units of the composite good, which she can buy and sell freely at a market price of $6. Given this information, what is Amanda's full or implicit income? Ans/ $ _(numeric). N

Principles of Economics, 7th Edition (MindTap Course List)

7th Edition

ISBN:9781285165875

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 9PA

See similar textbooks

Similar questions

1) Sharon spends her time (20h) between leisure (L) and work and he consume Y product from his working income (Py=1). Assume that she gets W$ per hour of working and has the following utility function: U (L, Y)=LY+2L a. b. C. Calculate the demand function for L and show it on a graph (L vs W). Calculate the labor supply (H) and show it on a graph (H vs W). What will happen to L, Y and H if the wage per hour (W) will decrease? =
Juan is currently working in a job that pays $25 an hour and he chooses to work 8 hours per day. Assume that Juan can work a maximum of 16 hours a day, and he has complete flexibility in how many hours a day he works. Illustrate Juan’s budget constraint and his optimal choice of consumption and leisure. What is the slope of his budget constraint? What does this slope represent? (As on any graph you draw, make sure that you label the axes, the intercepts and the optimal choice.) Juan begins receiving a government transfer payment of $100 per day. Add his new budget constraint to your graph in (a) and show his new optimal choice. Does he choose more or less consumption? More or less leisure? Explain why for both goods. The government imposes a tax of 25% on Juan’s earnings from work and increases his government transfer to $150 per day (the government transfer payment is not taxed.) Redraw the budget constraint from part (b) (omit the part (a) budget constraint), and add a new budget…
Sharon spends her time (16h) between leisure (L) and work and he consume Y product from his working income (P=1). Assume that she gets W$ per hour of working (W>0) and has the following utility function: U (L, Y) =LY 4Y. a.Calculate the demand function for L. and show it on a graph (L. vs W). b. Calculate the labor supply (H) and show it on a graph (H vs W). c.What will happen to L. Y and H if the wage per hour (W) will decrease?
a) If Kyeiwaa has GhC 50 of non-labor income per week, and she faces a market wage rate of GhC 5 per hour; and has 110 hours of nonsleeping hours to allocate between work and leisure activities (assuming she sleeps roughly 8hours per day) b) Write down the budget equation for Kyeiwaa c) Graph Kyeiwaa 's budget line. d) Assuming leisure is a normal good (with the aid of a graph), describe what will happen to Kyeiwaa 's hours of work if her non-labour income increases. e) If Kyeiwaa 's substitution effect dominates her income effect, with the aid of a diagram describe what will happen to her hours of work when her wage increases.
O See Hint A consumer faces a tradeoff between labor (L) and leisure (R). She consumes a composite good (C). When the consumer works, she earns an hourly wage of $20.00, and she spends a maximum of 24 hours on labor and leisure, but she chooses to work 7.00 hours. Whatever time she does not spend working, she spends on leisure. She starts with an initial endowment of 21.00 units of the composite good, which she can buy and sell freely at a market price of $9.00. Given this information, what is the consumer's real wage? * $ 15.56
Janie works for an accounting firm. Her wage increased from $30 per hour to $40 per hour. She can work up to 50 hours each week. The table below shows her utility from different levels of leisure and income. Before her raise, if Janie decreases her hours of work from 30 to 20 hours per week, the marginal utility gain from having more leisure is: Hours of Leisure Total Utility from Leisure Income Total Utility from Income 0 0 0 0 10 29 300 40 20 54 400 72 30 75 600 96 40 86 800 108 50 92 900 116 1200 120 1500 122 1600 124 2000 125 Question 4 options: 29 21 13 7
Ivan faces a labor supply decision. His well-behaved preferences over the two goods "hours of leisure' L and 'consumption' c can be represented by u= 4(L)1/2 +c. He has no non-labor income and can choose how many hours to work at the wage rate u per hour. The price per unit of consumption is p, and his available free time is T hours .a)Sketch Ivan's budget set, with axes, intercepts, and slope labeled (these will depend on the parameters w, p, and T) .b)Use the tangency method to find Ivan's demand functions for leisure and consumption (as functions of u, p. and T) .c) Let's think about Ivan's "time expansion path" (that is, the analog of the income expansion path a.k.a. income-consumption loci but for changes in T). Sketch it and explain why it has this shape. with reference to Ivan's demand functions.d) (3 points) In terms of parameters from the model, what is the most that Ivan would be willing to pay to have an extra hour of free time (that is, to increase T by 1)? Why?
Ivan faces a labor supply decision. His well-behaved preferences over the two goods "hours of leisure' L and 'consumption' c can be represented by u= 4(L)1/2 +c. He has no non-labor income and can choose how many hours to work at the wage rate u per hour. The price per unit of consumption is p, and his available free time is T hours .a) Sketch Ivan's budget set, with axes, intercepts, and slope labeled (these will depend on the parameters w, p, and T) .b) Use the tangency method to find Ivan's demand functions for leisure and consumption (as functions of u, p. and T) .c) Let's think about Ivan's "time expansion path" (that is, the analog of the income expansion path a.k.a. income-consumption loci but for changes in T). Sketch it and explain why it has this shape. with reference to Ivan's demand functions.d) In terms of parameters from the model, what is the most that Ivan would be willing to pay to have an extra hour of free time (that is, to increase T by 1)? Why?
1) Sharon spends her time (20h) between leisure (L) and work and he consume Y product from his working income (Py=1). Assume that she gets W$ per hour of working and has the following utility function: U (L, Y) =LY+2L C. vv). e. VS What will happen to L, Y and H if the wage per hour (W) will decrease? d. How would your answer to the previous question (c) will change if Sharon has a fixed amount of money (Wo) that is not connected to W? If Sharon has the following utility function: U= L³+ Y², is it possible that she will choose not to work at all? Explain and show the condition for your result if exists. |||
. An individual's utility function is given by u = 1000 x, + 450 x. + 5x, x. - 2x-x where x, is the amount of leisure measured in hours per week and x,is income earned measured in cedis per week. Det er mine the value of the marginal utilities, when x, = 138 and x= 500. Hence est imate the change in utility if the individual works for an extra hour, which increa ses earned income by GH¢ 15 per week. Does the law of diminishing ut ility hold for this function? %3D
Eileen is awake for 100 hours per week. Use the green line (triangle symbol) to draw Eileen's budget constraint if she earns $12 per hour. Then use the blue line (circle symbol) to draw her budget constraint if she earns $16 per hour. Finally, use the purple line (diamond symbol) to draw her budget constraint if she earns $20 per hour. 2000 1800 Wage of $12 per hour 1800 1400 1200 Wage of $16 per hour 1000 800 Wage of $20 per hour 600 400 200 10 20 30 40 50 60 70 80 90 100 Leisure (Hours) Consumption (Dollars)
A) Ana decides every day how many hours to work and how much beef to consume. She spends all income earned from work each day on consumption of beef. Her utility function for free time (t, 24 hours minus hours worked) and consumption (y) is: U(t, y) = 2t + y The price per unit of beef consumed is 4 and her hourly wage is 1. • Using a diagram and appropriate algebra, explain what Ana's optimal number of hours work and units of beef consumed are each day. Ana reads a book about the impact of beef consumption on climate change and realises that there is a cost to society of her beef consumption. She takes account of this impact on society in her own decisions, incorporating a disutility of -0.03y per unit of beef consumed. She still only consumes beef and spends all income earned each day on this consumption. • Explain, using a diagram and appropriate algebra, how recognition of the impact of her consumption choice on climate change impacts on Ana's daily free time and beef consumption…