Imagine a consumer - worker who has a total time endowment of T=100 hours per week. He/She can use these hours for work or for leisure. All the money that he/she will gain from the work will use for consumption. The Utility Function is
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- 21. Let U=x 2 +y 2 is the utility function of a worker who has 10 hours that to be allocatedbetween labour supply (L) and leisure (x). Let y is a consumption good whose price is 1.Wage rate (w) is Rs 1 and non-wage income is 20. Find out L.a) 10 b) 0 c) 5 d) 8 e) none 22. On the basis of the above question, hen w=0 and non-wage income is 40, find out L.a) 10 b) 0 c) 5 d) 8 e) noneIf pMP1>w1pMP1>w1 and you want to increase profits, should you increase, decrease or maintain the level of factor 1?I JUST WANT THE DIAGRAM FOR EACH PART. PLEASE DRAW THE DIAGRAMS, DONT TYPE IT!!!!!! WRONG ANSWERS WILL BE REPORTED. Consider the representative consumer who decides consumption and leisure. The preference is given by U (C,L) = αln C + (1 −α) ln L. Assume h = 1, i.e., the time endowment is one day. Suppose the non-wage income π −T increases while the wage rate w falls at the same time. The size of the changes can be different. Determine the effects on consumption demand and labour supply (i.e., leisure demand). Use the indifference map to explain your results in terms of income and substitution effects for the following cases: (i) The increase in π −T exactly cancels out the drop in w, i.e., |∆ (π −T)|= |∆w|. (ii) The increase in π −T is greater than the drop in w, i.e., |∆ (π −T)|> |∆w|. (iii) The increase in π −T is smaller than the drop in w, i.e., |∆ (π −T)|< |∆w|.
- A worker has 110 hours available in a week that can be used for leisure (L) or work (h). The utility function is U = (1 - α)ln(C) + α ln(L), where C is consumption. a) The price per unit of consumption is 1, the hourly wage is w, and the worker has a non-labor income of V. Show that the labor supply is: h* = (110(1-a)- (av)/w). Also, find the demand for consumption and leisure. b) What is the effect on labor supply of i) an increase in the hourly wage and ii) an increase in non-labor income? c) Set α = ½. What are C, L, and h when w = 200 and V = 10000? What is the reservation wage? d) What is the effect on labor supply of i) a 30% income tax and ii) a 10% wealth tax (on V)? e) What is the labor supply if V increases to 11600? f) An increase in V to 11600 gives the worker the same utility as w = 250 and V = 10000 (you do not need to show it). What are the income, substitution, and total effects on labor supply of an increase in wage from 200 to 250 while V remains at 10000?…The weekly preferences over consumption (C) and leisure(L) are defined by u(C, L) = √C + 3√L. The person receives a weekly allowance of m from The hourly wage is $18 per hour, and the person can work up to50 hours each week (T = z + L = 50), where z is the number of hours spent working). a)How many hours will the person work if her allowance is m= $450 per week b) What is the smallest allowance m for which the person will stopworking altogether (z∗ = 0) for a wage of w = 18?Tatum is a mother of Anny (1 year old). Tatum derives utility from income Y (i.e. a disposable income that she can spend on consumption goods other than childcare) and leisure L according to the utility function U(Y,L)=Y*L . She has non-labour income of $300 per day. Her time endowment is 16 hours per day that can be spent either on Leisure (which mostly consists of caring for Anny) or labour market work. If Tatum works she has to leave Anny in the child care. Tatum’s wage is $30 per hour, while the childcare cost $5 per hour. Tatum only uses childcare when she works. Compute how many hours Tatum will work under these circumstances. Round your answer to the second decimal point.
- Why does a worker allocate his or her time over the life cycle so as to work more hours in those periods when the wage is highest? Why does the worker not experience an income effect during those periods?36 - When the wage increases from 200 TL to 500 TL, which of the following is found when we subtract the ratio showing how much of the difference after the 300 TL change goes to consumption from 1? a) MPI B) APC C) MPS D) APS TO) MPCA worker receives, when unemployed, an offer to work forever at wage w, where w is drawn from the distribution F(w). Wage offers are identically and independently distributed over time. The worker maximizes Where ct is consumption and lt is leisure. Assume Rt is i.i.d. with distribution H(R). The budget constraint is given by And lt + nt ≤ 1 if the worker has a job that pays wt. If the worker is unemployed, the budget constraint is at+1 ≤ Rt(at + z − ct) and lt = 1. Here z is unemployment compensation. It is assumed that u(·) is bounded and that at , the worker’s asset position, cannot be negative. This assumption corresponds to a no-borrowing assumption. Write the Bellman equation for this problem.
- Q2: Let a consumer’s daily hours of work is denoted by H, and hours of leisure by L. Consumer has no other source of income except wages for hours worked. She consumes what she earns each day. Her utility function is U(C, N) = ln(C) + 3 ln(N) Where C stands for the dollar amount of her consumption. Now answer following questions (a) Suppose the wage rate is 50Rs. per hour. Write down the consumer’s utility function and budget constraint with C and H as the choice variables. (b) How many hours will she choose to work, and what will be the resulting utility?Consider a consumer with the following utility function for consumption and leisure: U (R, C ) = 160 ln N + Y where N is the hours of leisure (“recreation”) consumed per day (24 maximum) and Y is dollars spent on consumption (p = 1). The consumer has an hourly wage w. (a) Assume the consumer derives all income from work at a wage rate w. Derive the labor supply function, LS(w). (b) For what values of w does the consumer work zero hours? (Hint: does a corner solution arise?) (c) Suppose that w = 10. How many hours does this consumer work? If the wage rate increases to w′ = 16, how many hours do they work? What is the total effect on the supply of labor?Refer to the labor–leisure budget constraint shown to answer the questions. This curve shows trade-offs between income and leisure that must be made over the course of one day. How much does this person earn per hour? $ At point A, how many hours of labor are selected? hourshours At point A, how many hours of leisure are selected? hours