Answer to Question #275368 in Economics for mayank

Question

Suppose the consumer has the utility function

U(C,l)=0.5 √C+√ l

and has h = 24 hours available, some of which are used as leisure (l) and some supplied to the labor market (NS). Hours of work are paid at the real wage w. The profit income is π = 15. The consumer pays no tax.

Write down the budget constraint and the maximization prob- lem (a Lagrangian) and find the first order conditions for the consumer

Find an expression for the quantity of labor supplied

Answer 1

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