5. Cindy gains utility from consumption C and Leisure L. Then most leisure she can consume in any given week is 110 hours. Her utility function is U(C, L) = C × L. Cindy receives $660 each week from her great-grandmother. (a) Find her marginal rate of substitution |M RS|. (b) Find her reservation wage. (c) Interpret the reservation wage.

5. Cindy gains utility from consumption C and Leisure L. Then most leisure she can consume in any given week is 110 hours. Her utility function is U(C, L) = C × L. Cindy receives $660 each week from her great-grandmother. (a) Find her marginal rate of substitution |M RS|. (b) Find her reservation wage. (c) Interpret the reservation wage.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.10P

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