Jack earns 5 dollars per hour. He has 100 hours per week which he can use for either labor or leisure. The government institutes a plan in which each worker receives a $100 grant from the government but has to pay 50% of his or her labor income in taxes. If jack's utility function is u(c, r) = cr, where c is dollars w
Answers
he can earn 250 dollars per week
Answer:
He can earn 200 dollars per week.
Explanation:
In this scenario, the utility function is defined as u(c, r) = cr, where c is the dollar amount of goods received and r is the number of leisure hours per week.
The utility function is a technique used in economics to measure a consumer's happiness or level of happiness in relation to their use of tangible goods like clothing or food. In rational choice theory, the utility function is commonly used to evaluate how people behave.
Here, 1hour=$5
100hours=(5*100)=$500
Government laws are exempt up to $100 ($500 - $100 = $400).
therefore, weekly earnings = $400/50% = $200
A term used to determine the value or worth of a good or service is utilized.
To learn more about the Consumption of goods, visit:
https://brainly.in/question/23064957
To learn more about Utility functions, visit:
https://brainly.in/question/33558111
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