Goldstone maximizing his utility

Reference no: EM13941347

Ch 12 - Numerical Problem 6

Jake Goldstone is working 30 hours per week. His marginal utility of income is 2, his marginal utility of leisure is 60, and his hourly wage is $20. Assume throughout this problem that the income effect is zero.
Is Mr. Goldstone maximizing his utility?
Would working more or less increase his utility?
If his wage rose to $30 per hour, would he be maximizing his utility by working 30 hours per week? If not, should he work more or fewer hours?
At a wage of $40 per hour, would he be maximizing his utility? If not, would working more or less than 30 hours per week increase his utility?

Reference no: EM13941347

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