Karenna optimal choice of work

Assignment Help Business Economics
Reference no: EM133132542

Suppose Karenna has a utility function U(C, L) = Co.5 + 10.5 de- fined over leisure (L) and consumption (C), measured as expenditure. Karenna has 200 hours in a month to divide between leisure and labor. Her wage is $14 per hour. Karenna also receives an income support benefit from the government equal to $200 a month which is unrelated to her work decision, i.e. there is a 0% benefit reduction rate. Karenna has no other income. How much will Karenna choose to work and how much consumption expenditure will she have? How does this answer change if her benefit is raised from $200 to $300? Thinking in theoretical terms, what happens to Karenna's optimal choice of work and her personal utility when her benefit is raised? Does this policy change impose any dead weight loss on society?

Reference no: EM133132542

Questions Cloud

Price elasticity of demand for season tickets : The price of season tickets to performing arts theater decreases by 4 percent As a result, the quantity demanded increases by 6 percent.
Calculate the maximum change in gdp : Assume the marginal propensity to save was 0.5 instead of 0.75. Calculate the maximum change in GDP from the entire stimulus package? Show your work.
Issuing stock options : Recently, a few companies have been accused of issuing stock options to their top executives at the lowest stock price of the year. Executives can later sell th
What is meant by cost minimization : What is meant by Cost minimization for a given level of production? Offer an example.
Karenna optimal choice of work : Suppose Karenna has a utility function U(C, L) = Co.5 + 10.5 de- fined over leisure (L) and consumption (C), measured as expenditure. Karenna has 200 hours in a
Prove that the function is monotone nondecreasing : Prove that the function is monotone nondecreasing - Compute the distribution and Find the support of the distribution T
Creating small business : Develop an idea for a prospective small business and select a name for the company.
Difference between commerce and ecommerce : What is Commerce? What is the difference between Commerce and Ecommerce?
What are the varnishes classified by curing method : What are the varnishes classified by curing method

Reviews

Write a Review

Business Economics Questions & Answers

  Find sigma the elasticity of substitution

The Constant Elasticity of Substitution Production Function Q(K,L) = A[b(K^b) + (1-b)L^p]y/p. (b = beta p = rho y = gamma) Determine the returns to scale for this production function. Find sigma, the elasticity of substitution.

  What are the reserve–deposit ratio-currency–deposit ratio

In the economy of Panicia, the monetary base is $1,000. People hold a third of their money in the form of currency (and thus two-thirds as bank deposits). Banks hold a third of their deposits in reserve. What are the reserve–deposit ratio, the curren..

  Car industry sales of big ticket items in particular the

car industry sales of big ticket items in particular the autos declined strongly during the current recession and the

  Null and alternative hypotheses

In establishing a statistical hypothesis testing of this situation, give the required null and alternative hypotheses for such a test, testing to see

  What contributes to the belief in conspiracy theories

Many conspiracy theories have been offered as explanations for the assassinations of the great leaders of the 1960s and still fascinate society today. Share some of those conspiracy theories. What contributes to the belief in conspiracy theories?

  Characteristic of market structure

1.) What is the difference between a market structure and a characteristic of market structure?

  Preferred by recipients over in-kind transfers

1. Why would cash transfers typically be preferred by recipients over in-kind transfers? What are the pros and cons of each from a government perspective?

  Research equipment and has projected the benefits

(a) What is the after-tax rate of return? (b) What is the before-tax rate of return?

  What is the minimum percentage of cell phone bills

What is the minimum percentage of cell phone bills that will be between 54 and 102?

  Qpluto inc has a beginning cash balance of 430 on february

q.pluto inc has a beginning cash balance of 430 on february 1st.the firm has project sales of 600 in january 800 in

  Marginal expense of getting a good science teacher

It would have to pay science teachers $90,000 to hire good science teachers. If one out of five teachers is a science teacher, what is the marginal expense of getting a good science teacher instead of a poor one?

  Explain how the estimate would be obtained from the model

A publisher is considering launching a new magazine for women in the 18–25 years age group. It is thought to be vital to the long-term success of the magazine that its sales should reach break-even point within its first year. Sketch out the key feat..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd