Question
In: Economics
Priya has preferences over consumption and leisure given by U(C,L) = CL. Her total number of...
Priya has preferences over consumption and leisure
given by U(C,L) = CL. Her total number of available hours in a
given week is 100. Her non-labour income is £800. If she chooses to
work, she earns w = £20 per hour. If the government starts a
welfare policy that pays an amount of £B to all non-workers and
pays 0 to all workers, at what value of B will Priya opt out of the
labour force in order to go on welfare?
Solutions
Expert Solution
Solution: Priya has total available hour in a week = 100 hr
If she choose to work se will be earning wage = £20 per hour
Non-Labour Income for 100hr = £800----------(1)
If government is paying £B per hr to all non-worker
The the value of B from expression (1) wil be =£800100 hr=£8
Therefor value of B= £8
Rahul Sunny answered 2 years agoRelated Solutions
Robert has utility function u(c,l) = cl over consumption, c, and leisure, l. Robert is endowed...
Robert has utility function u(c,l) = cl over consumption, c, and
leisure, l. Robert is endowed with 16 hours of leisure. Let the
price of consumption be p = 1. Robert can sell his time in the
labor market at hourly wage, w. The equilibrium we will consider
implies zero firm profits, so labor income is the only source of
income for consumers. Thus, Robert’s budget line can be written by
c + wl = 16w. Production of the consumption...
Robert has utility function u(c,l) = cl over consumption, c, and leisure, l. Robert is endowed...
Robert has utility function u(c,l) = cl over consumption, c, and
leisure, l. Robert is endowed with 16 hours of leisure. Let the
price of consumption be p = 1. Robert can sell his time in the
labor market at hourly wage, w. The equilibrium we will consider
implies zero firm profits, so labor income is the only source of
income for consumers. Thus, Robert’s budget line can be written by
c + wl = 16w. Production of the consumption...
Suppose preferences for consumption and leisure are: u(c, l) = ln(c) + θ ln(l) and households...
Suppose preferences for consumption and leisure are: u(c, l) =
ln(c) + θ ln(l)
and households solve:
maxc,l u(c, l)
s.t. c=w(1−τ)(1−l)+T
Now suppose that in both Europe and the US we have:
θ = 1.54
w=1
but in the US we have:
τ = 0.34
T = 0.102
while in Europe we have:
τ = 0.53
T = 0.124
The values for τ and T above are not arbitrary. If you did the
calculations correctly, you should find that...
Shelly’s preferences for consumption and leisure can be expressed as U(C, L) = (C – 100) (L – 40).
Shelly’s preferences for consumption and leisure can be
expressed as U(C, L) = (C – 100) (L – 40). This utility function
implies that Shelly’s marginal utility of leisure is C – 100 and
her marginal utility of consumption is L – 40. There are 110
(non-sleeping) hours in the week available to split between work
and leisure. Shelly earns $10 per hour after taxes. She also
receives $320 worth of welfare benefits each week regardless of how
much...
2-6. Shelly’s preferences for consumption and leisure can be expressed as U(C, L) = (C -...
2-6. Shelly’s preferences for consumption and leisure can be
expressed as U(C, L) = (C - 100) × (L - 40) This utility function
implies that Shelly’s marginal utility of leisure is C - 200 and
her marginal utility of consumption is L- 40. There are 110
(non-sleeping) hours in the week available to split between work
and leisure. Shelly earns $10 per hour after taxes. She also
receives $320 worth of welfare benefits each week regardless of how
much...
Shelly’s preferences for consumption and leisure can be expressed as U(C, L) = min(C,2L) This utility...
Shelly’s preferences for consumption and leisure can be
expressed as U(C, L) = min(C,2L) This utility function implies that
Shelly views consumption and leisure as compliments. There are 110
(non-sleeping) hours in the week available to split between work
and leisure. Shelly earns $10 per hour after taxes. She also
receives $320 worth of welfare benefits each week regardless of how
much she works.
a) Graph Shelly’s budget line.
b) Find Shelly’s optimal amount of consumption and leisure.
c) What...
Question 1: Given the following utility function: (U=Utility, l=leisure, c=consumption) U = 2l + 3c and...
Question 1:
Given the following utility function: (U=Utility, l=leisure,
c=consumption)
U = 2l + 3c
and production function: (Y=Output, N or Ns=Labour or Labour
Supply)
Y = 30N1/2
If h = 100 and G =10 (h=Hours of labour, G=Government spending).
Find the equilibrium levels of the real wage (w), consumption (c),
leisure (l), and output (Y).
Question 2: (Continuting from question 1)
a, Find the relationship between total tax revenue and the tax
rate if G = tWN. (G=Government spending,...
Question 1: Given the following utility function: (U=Utility, l=leisure, c=consumption) U = 2l + 3c and...
Question 1: Given the following utility function: (U=Utility,
l=leisure, c=consumption) U = 2l + 3c and production function:
(Y=Output, N or Ns=Labour or Labour Supply) Y = 30N1/2 If h = 100
and G =10 (h=Hours of labour, G=Government spending). Find the
equilibrium levels of the real wage (w), consumption (c), leisure
(l), and output (Y). Question 2: (Continuting from question 1) a,
Find the relationship between total tax revenue and the tax rate if
G = tWN. (G=Government spending,...
8、Assume that utility depends on consumption c and leisure l , U(c,l) . (a) Define reservation...
8、Assume that utility depends on consumption c and leisure l ,
U(c,l) .
(a) Define reservation wage.
(b) “The reservation wage increases with (i) non-labor income,
(ii) fixed monetary costs of work, (iii) fixed time costs of work,
and (iv) the price of consumption.” Prove or disprove each of these
four claims.
25) Consider the following one-period, closed-economy model. Utility function over consumption (C) and leisure (L) U(C,L)...
25) Consider the following one-period, closed-economy model.
Utility function over consumption (C) and leisure (L) U(C,L) = C
1/2 L 1/2 Total hours: H = 40 Labour hours: N S = H – L Government
expenditure = 30 Lump-sum tax = T Production function: Y = zN D
Total factor productivity: z = 2 The representative consumer
maximizes utility, the representative firm maximizes profit, and
the government balances budget. Suppose there is an increase in
total factor productivity, z, to...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Question: what is the difference between rights of assertion and observation assertion. Include which financial statements...
- how to read a csv file in php and make a html table? I can't use...
- ABC Inc. is evaluating a project that will increase annual sales by $230,000 and annual cash...
- Identify the behavior, values, and consumption patterns from people in New York City versus Milan Italy.
- A stock has a required return of 10%, the risk-free rate is 4.5%, and the market...
- How do the media options available to advertisers vary in different parts of the world? (Choose...
- Charming Paper Company sells to the 12 accounts listed here. Account Receivable Balance Outstanding Average...
ADVERTISEMENT