Utility function over money income m and leisure

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Assume there is a Worker who has a utility function over money income m and leisure l is u(m,l)=(m*l)^1/2. This worker choose how many hours to supply to the labor market where h=16-l subject to the market hourly wage w. The feasibility constraint is such that neither leisure nor labor supply an exceed 16 hrs and cannot be negative. He has unearned income a=8.

The MUL=1/2(m/l)^1/2 and MUM=1/2(l/m)^1/2. Assuming that the interior solution for labor supply will dominate the corner solutions. What is his optimal labor supply as a function of the market wage w?

Reference no: EM13894177

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