Answer to Question #249882 in Economics for Maha

Question

Consider an individual that decides how much to consume and how much to work. Denote consumption by c and the price of consumption by p.The total time(number of hours) available to the individual is T, which they split between leisure, denoted l, and working, denoted h. For each hour worked the individual is paid a wage w and they also have unearned income, denoted by y. The individual s budget constraint can be written: pc greater than symbol y+wh

Their utility function is given by U(c,l).

(a) show the budget constraint can be re written: pc+wlgreater than symbol y +wT

Answer 1

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