Construction workers in the town of Cortland, NY have Cobb-Douglas utility for labor and consumption, UL=(20-L)C, MRS=C20-L where L is the number of hours of labor supplied in a day and C is the dollar amount of consumption goods purchased with wage income (pc=$1 ). R=20-L is the number of hours of leisure that the worker has during the day. Derive the labor supply function for workers in Cortland. Draw the labor supply curve on a graph with L on the horizontal axis and w on the vertical axis.

Construction workers in the town of Cortland, NY have Cobb-Douglas utility for labor and consumption, UL=(20-L)C, MRS=C20-L where L is the number of hours of labor supplied in a day and C is the dollar amount of consumption goods purchased with wage income (pc=$1 ). R=20-L is the number of hours of leisure that the worker has during the day. Derive the labor supply function for workers in Cortland. Draw the labor supply curve on a graph with L on the horizontal axis and w on the vertical axis.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.2P

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