(Answered) Lindsay currently works as project director at the natural

Economics

Lindsay currently works as project director at the Natural Resources Defense Council earning $50 per hour of work. She likes her work and her utility over leisure (L) and consumption (Y) is U(L,Y)=(30L^.5)(Y^.5) so that her marginal utility of leisure is MUL=(15L^-.5)(Y^.5) and her marginal utility of consumption is MUY =(15L^.5)(Y^-.5)

a. What is Lindsay's budget constraint for consumption good (Y) and leisure (L)?

b. What is Lindsay's optimal level of work and consumption? Show your work.

c. If Lindsay's employer offered a bonus in the amount of $200, how would that affect her hours worked? Explain briefly, paying particular attention on whether there are substitution and income effects.

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Business Economics, Economics

Category:- Business Economics
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