HOMEWORK > ECON 425: Economics of Public Expenditures Homework Assignment 5 SOLUTIONS
Pennsylvania State University ECON 425 Problem 1: Labor-Leisure Choice. Kim has utility over consumption c and leisure l represented by U(c, l) = c1/3l2/3 Kim has 2,000 hours to spend on either labor or leisure. Her hourly wage is w = $7.50. a) Draw Kim’s budget constraint. b) What is Kim’s optimal level of consumption? Leisure ...[Show More]
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