A household has an endowment of 1 unit of time .The household maximises its utility u = In(c) + bln(1 – 1), where e denotes consumption and le [0, 1] denotes time spent working. It finances its consumption from labour income wl, where w is the market wage rate per unit of labour time. If the market wage rate goes up, then equilibrium labour supply of the houschold a) Increases b) Decreases c) Remains constant d) Changes in ambiguous manner

A household has an endowment of 1 unit of time .The household maximises its utility u = In(c) + bln(1 – 1), where e denotes consumption and le [0, 1] denotes time spent working. It finances its consumption from labour income wl, where w is the market wage rate per unit of labour time. If the market wage rate goes up, then equilibrium labour supply of the houschold a) Increases b) Decreases c) Remains constant d) Changes in ambiguous manner

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter4: Utility Maximization And Choice

Section: Chapter Questions

Problem 4.14P

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