Consider a closed economy with consumption, production, and government. The representative consumer always desires a consumption bundle where the quantities of consumption and leisure are such that C=al and a = 1. Show the following on your answer sheet. [1] Suppose that w = 0.75, profit = 8, and T = 6. Determine the consumer's optimal choice of consumption and leisure, showing every step of your calculation. [2] Illustrate the consumer's equilibrium from part [1] in a diagram.

Consider a closed economy with consumption, production, and government. The representative consumer always desires a consumption bundle where the quantities of consumption and leisure are such that C=al and a = 1. Show the following on your answer sheet. [1] Suppose that w = 0.75, profit = 8, and T = 6. Determine the consumer's optimal choice of consumption and leisure, showing every step of your calculation. [2] Illustrate the consumer's equilibrium from part [1] in a diagram.

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter1: What Is Economics

Section1.3: What Do Economists Do?

Problem 5R

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