Determine the nominal reservation wage, Microeconomics

Assignment Help:

Mikes' preferences for consumption and leisure may be represented by the Utility function: u(C, L) =  ( C-200)*(L-80) . His marginal utilities of leisure and consumption are (C-200) and ( L-80) respectively. There are 168 hours in the week available for both work an leisure. He earns a nominal wage of $20 and the price of consumption goods is $4. He also receives a nominal amount of $1280 of non-labour income as a transfer. Note: First, make it all real!

a)      Graph Mikes' budget line  and label all.

b)      If Mike works 40 hours and he is on the budget line, what is his MRS?

c)      What is his optimal amount of consumption, leisure and work?

d)      What is his nominal reservation wage?


Related Discussions:- Determine the nominal reservation wage

Central planning of economic system, Q. Central Planning of economic system...

Q. Central Planning of economic system? Central Planning: An economic system in that crucial decisions regarding consumption, investment, exchange rates, interest rates and pri

Supply and demand shifter, What happens to the market for cchicken wings if...

What happens to the market for cchicken wings if the price of beer increases?

Perfect competition, Perfect competition: The behaviours of firms in p...

Perfect competition: The behaviours of firms in perfect competition. It should be noted that firms that fit into perfect competition model are very rare in real-life situation

Current event, Select a news article dated within the previous two months a...

Select a news article dated within the previous two months and analyze the issue using the economic concepts and theory learned in this class

Determinants of social demand - economies of scale , Determinants of Social...

Determinants of Social Demand - Economies of Scale The universe of knowledge is highly diverse. There are certain branches of knowledge whose value to human culture and civil

EM13106443, May I get a quote on title EM13106443. Thanks

May I get a quote on title EM13106443. Thanks

MS6012 A01, Analyze the sustainable approach to waste reduction developed b...

Analyze the sustainable approach to waste reduction developed by the company you selected. Include the following: Its products Previous methods of production The way it implemented

Exchange rate policy - imf, Exchange Rate Policy: After the second ame...

Exchange Rate Policy: After the second amendment to the Articles of Agreement of IMF which came into effect on April 1, 1978, every member is free to choose its own exchange r

Wage labour, Wage Labour: A form of work in that employees perform labour f...

Wage Labour: A form of work in that employees perform labour for others, under their direction, in return for salaries orwages. Employer controls and owns the product of the labour

Mirginal utility, what is the basis of marginal utility

what is the basis of marginal utility

Write Your Message!

Captcha
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