• 2021-04-14
    Mr. Cog has 18 hours per day to divide between labor and leisure. His utility function is U (C,R) = CR; where C is dollars per year spent on consumption and R is hours of leisure. If he has a nonlabor income of 40 dollars per day and a wage rate of 8 dollars per hour, he will choose a combination of labor and leisure that allows him to spend: