Terry attends college and works part-time in a drug store. She can work up to 40 hours each week and is paid $9 per hour. The following table shows her utility from different levels of leisure and income. Hours of Leisure Total Utility from Leisure Marginal Utility of Leisure Work Hours Income Total Utility from Income Marginal Utility from Income 5 18 0 5 45 35 0 10 34 3.2 10 90 59 4.8 15 48 2.8 15 135 77 3.6 20 56 1.6 20 180 86 1.8 25 60 0.8 25 225 92 1.2 30 65 1 30 270 98 1.2 35 69 0.8 35 315 103 1 40 72 0.6 40 360 107 0.8 Terry decides to decrease her work hours from 20 to 10. What would be her marginal utility gain from having additional leisure time? 0.9 What would be marginal utility loss from less income? 2.7 What will be her total utility from both leisure and income when working 10 hours per week? The required value of the total utility is 124 utils. Here's the question below in Bold that needs to be answered, please 1. Does it make sense from the perspective of utility for Terry to decrease her work hours? (Think about the total utility calculations.). Why or Why not?
Terry attends college and works part-time in a drug store. She can work up to 40 hours each week and is paid $9 per hour. The following table shows her utility from different levels of leisure and income.
|
Hours of Leisure |
Total Utility from Leisure |
|
Work Hours |
Income |
Total Utility from Income |
Marginal Utility from Income |
|
5 |
18 |
0 |
5 |
45 |
35 |
0 |
|
10 |
34 |
3.2 |
10 |
90 |
59 |
4.8 |
|
15 |
48 |
2.8 |
15 |
135 |
77 |
3.6 |
|
20 |
56 |
1.6 |
20 |
180 |
86 |
1.8 |
|
25 |
60 |
0.8 |
25 |
225 |
92 |
1.2 |
|
30 |
65 |
1 |
30 |
270 |
98 |
1.2 |
|
35 |
69 |
0.8 |
35 |
315 |
103 |
1 |
|
40 |
72 |
0.6 |
40 |
360 |
107 |
0.8 |
Terry decides to decrease her work hours from 20 to 10.
What would be her marginal utility gain from having additional leisure time? 0.9
What would be marginal utility loss from less income? 2.7
What will be her total utility from both leisure and income when working 10 hours per week? The required value of the total utility is 124 utils.
Here's the question below in Bold that needs to be answered, please
1. Does it make sense from the perspective of utility for Terry to decrease her work hours? (Think about the total utility calculations.). Why or Why not?
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