Please show process of how to solve question please. Clear and legible writing would be appreciated !!! Consider the following one-period model.ConsumerUtility function over consumption (C) and leisure (L)1 1U(C.L) = cL?Total hours: H = 40Labour hours: N -H-LNon-labour income: TTLump-sum tax:THourly wage: wFirmProduction function: Y = zF(N") = zN%3DTotal factor productivitiy: z= 2GovernmentGovernment spending (exogenous): G = 20Suppose that the total factor productivity, z, increases to 5. What is the substitution effect of this wage change on labour supply(NyO A. -5.51B. -8.51C. +5.51O D. +8.51E None of the above

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Tollowing one-penod model. Consumer Utility function over consumption (C) and leisure (L) 11 U(C.L) = cL? Total hours: H = 40 Labour hours: N° =H-L Non-labour income: T Lump-sum tax: T Hourly wage: w Eirm Production function: Y= zF(N) = zN Total factor productivitly: z 2 Government Government spending (exogenous): G= 20 Suppose that the total factor productivity, z, increases to 5. What is the substitution effect of this wage change OA. -5.51 B. -8.51 O C. +5.51 D. +8.51 OE None of the above

Tollowing one-penod model. Consumer Utility function over consumption (C) and leisure (L) 11 U(C.L) = cL? Total hours: H = 40 Labour hours: N° =H-L Non-labour income: T Lump-sum tax: T Hourly wage: w Eirm Production function: Y= zF(N) = zN Total factor productivitly: z 2 Government Government spending (exogenous): G= 20 Suppose that the total factor productivity, z, increases to 5. What is the substitution effect of this wage change OA. -5.51 B. -8.51 O C. +5.51 D. +8.51 OE None of the above

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter18: Pricing The Factors Of Production

Section: Chapter Questions

Problem 6DQ

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