Mary is a teacher who has 10 hours a day to allocate between work and leisure. For each hour worked, Mary receives $10. Her basket price is $2. Mary’s utility function is given by:๐(๐ถ,๐ )=๐ถ%๐ $ a)Calculate the number of hours that Marywill dedicate to leisure and work per day. Show the leisure demand function and the consumption demand function.
Question1A consumer has autility function๐=๐!๐”Where๐!and๐”are the consumed quantities ofA andB,and an initial endowment/allocation of๐!$$$$=2and๐”$$$=1. The prices of these goods are given and equal to 1.a)Set up the consumer budget constraint.b)Plot it/Represent it graphically.c)Calculate the optimal basket. Question2Consider an economy with two periods where individuals have perfect access to credit, which has an interest rate of […]