For questions 7 - 12: Ashley's preferences for consumption and leisure can be expressed as U(C, L) = (C-50) *(L-20). This utility function implies that Ashley's marginal utility of leisure is C - 50 and her marginal utility of consumption is L -20. There are 100 hours in a week available for work and leisure. Ashley earns $10 per hour. She also receives $350 worth of welfare benefits each week regardless of how much she works.
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- Question 3: Shelly's preferences for consumption and leisure can be expressed as: U(C, L) = (C-200) × (L-80) This utility function implies that Shelly's marginal utility of leisure is C -200 and her marginal utility of consumption is L - 80. There are 168 hours in the week available to split between work and leisure. Shelly earns $5 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 constraint. (b): What is Shelly's marginal rate of substitution when L = 100 and she is on her budget line? Question 4: The utility function of a worker is represented by U(C, L) = C x L. Suppose this person currently has a weekly income of $600 and choose to enjoy 70 hours of leisure per week. How many ad- ditional dollars of income would it take to entice the worker to work 10 more hours?Sheila's income and leisure preferences can be expressed by U(Y, L) = 2 x (YL - 40Y - 100L) This utility function implies that Sheila's marginal utility of leisure is 2Y - 200 and her marginal utility of income 2L-80. In a week, there are 168 hours available for her to allocate between work and leisure. Sheila earns $10 per hour after taxes and receives $120 worth of welfare benefits each week during the pandemic regardless of how many hours she decides to work. Assume that the price index is 1. a) What is Sheila's budget line? b) What is Sheila's marginal rate of substitution when L = 100 and she is on her budget line? c) What is Sheila's optimal relationship between income and labour hours? d) What is Sheila's optimal amount of labour hours, leisure hours, and income? e) At the optimal allocation, what is Sheila's utility level? Show your work.Katie’s preferences for consumption and leisure can be expressed as U(C, L) = (C – 80) x (L – 40) This utility function implies that Katie’s marginal utility of leisure is C – 80 and her marginal utility of consumption is L – 40. There are 110 hours in the week available to split between work and leisure. Katie earns $15 per hour after taxes. She also receives $200 worth of assistance benefits each week regardless of how much she works. Graph Katie’s budget line. What is Katie’s marginal rate of substitution when L = 70 and she is on her budget line? What is Katie’s reservation wage? Find Katie’s optimal amount of consumption and leisure.
- Rebecca's wage is $10 per hour, and she can work up to 60 hours per week. The table and the budget constraint graph show the trade-off that she faces between income and leisure in one week of potential work at this wage. Her manager raises her wage to $15 per hour. Change the graph below to illustrate her new income-leisure budget constraint. The line and the individual endpoints are movable. Assume that nothing else changes. Hours Leisure time Income ($) (hours) worked at $10/hour 0 200 400 600 0 20 40 60 60 40 20 0 Income ($) 1000 900 800 700 600 500 400 300 200 100 0 0 10 20 30 40 50 60 70 80 90 Leisure (hours)a) Chika has calculated the marginal utility that she derives from her paid employment and from leisure. This is presented in table below. In her ideal world, where she could work as few or as many hours as she wished, how would she allocate her sixteen waking hours? (She does need to sleep.) Hours 1 2 3 4 5 6 7 8 9 10 MU Paid Employment 105 95 85 75 65 55 45 35 25 15 MU Leisure 100 90 80 70 60 50 40 30 20 10 hours working and b) Unfortunately, Chika begins to realize that unless she gets an education she will not enjoy a high salary and therefore, will not be able to afford more leisure time. She therefore decides to spend six hours each day studying (in addition to her eight hours of sleep). How will she now divide the remaining hours between work and leisure? hours working and hours leisure. hours leisure.Suppose your weekly allowance from your parents is $100 and your part-time job pays $10 per hour. The slope of the line plotting the relationship between the hours worked per week (the horizontal axis) and the income per week (the vertical axis) is $. (Enter your response as an integer.) Suppose you start with 10 hours of part-time work and then decide to increase your time working by 3 hour(s). By how much will your weekly income increase? $. (Enter your response as an integer.) Suppose you start with 10 hours of work and then decide you need additional income of $20 per week. How many additional hours would you have to work? hours. (Enter your response as an integer.)
- The utility of Amanda for leisure (L) and income (Y) is U = LY. The price of income is 1. If Amanda uses her spare L hours a day, (24 - L) hours will be labored. Since wages are w, the daily income is (24 - L). If the wages are positive, show that the optimal number of leisure hours that Amanda will use will always be the same. How much leisure time does Amanda demand and how much work time do she want to provide?What is the budget line for consumption (C) and leisure (L) if a person faces a constant wage of $12 per hour, there are 110 hours in the week to work, and she receives nonlabor income of $300 per week?Suppose Marcus eats nothing but burritos for dinner. He buys 30 burritos each month. During the last couple of weeks, Marcus noticed a decrease in the price of burritos. The price of burritos fell from $6.00 per burrito last month to $5.75 per burrito this month. Assume that Marcus has a fixed income of $180 that he can spend on burritos. How many burritos can Marcus afford to buy at the new price of $5.75?
- what is the budget line for consumption and leisure if a person faces a constant wage of $5 per hour , there are 168 hours in the week to work,and she received non-labor income of 200 per weekThe graph below shows the budget constraint between income and leisure for an individual. The individual has a total of 4000 hours to divide between working and leisure for the entire year. The maximum an individual could make by working all 4000 hours is $20,000. For every hour spent in leisure, one less hour is spent working and vice versa. Suppose that, as illustrated in the graph, a government antipoverty program guarantees the individual $10, 000 in income per year. As the current government support is too low to help individuals out of poverty, the government has decided to increase the government support to $22, 000 per year. The individual is no longer motivated to work any hours as it is not possible for him/her to make more income than the guaranteed government support. Move the Government Support line to illustrate this outcome. Provide your answer below: 30000 25000 (0, 20000). 20000 15000- Government Support ($10000) 10000 5000 (4000, Q) 2000 4000 3000 Leisure (Hours) 1000…An individual values both consumption and leisure. Suppose the individual has 1600 hours per week they can allocate between leisure and work. IF the individual works, they make a wage of $25 per hour. The individual's utility function is given as a function of leisure time, L and consumption, c: U(L, c) = L^(1/2)c ^ (1/2) a) Draw the individual's budget constraint for leisure and consumption. b) How much leisure time will the individual have when utility maximizing? c) Consider a Universal Basic Income policy like the one proposed by Andrew Yang that would give all individuals a lump -sum, unconditional cash transfer of $1,000 each month. How much leisure time will the individual have when utility maximizing with the cash transfer? d) Now suppose, instead of a cash transfer, a minimum wage of $40 per hour is implemented. How much leisure time will the individual have when utility maximizing with the cash transfer? e) What change in leisure time can be attributed to the substitution…