« previous next »

Author Question: Economists typically assume that the owners of firms wish to A) produce efficiently. B) maximize ... (Read 57 times)

shofmannx20

  • Hero Member
  • *****
  • Posts: 562
on: Jul 1, 2018
Economists typically assume that the owners of firms wish to
 
  A) produce efficiently.
  B) maximize sales revenues.
  C) maximize profits.
  D) All of the above.

Question 2

Suppose a person's utility for leisure (L) and consumption (Y) can be expressed as U = Y  L and this person has no non-labor income. Assuming a wage rate of 10 per hour, show what happens to the person's labor supply when the person wins a lottery prize of 100 per day.
 
  What will be an ideal response?
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


ghepp

  • Sr. Member
  • ****
  • Posts: 361
Reply #1 on: Jul 1, 2018
Answer to Question 1

C

Answer to Question 2

Rearranging yields U = (Y + 10H)  (24 - H) = 24Y + 240H - YH  10H2. Maximizing utility with respect to H yields dU/dH = 240 - Y - 20H = 0. Before winning the lottery, Y = 0, so H = 12. After winning the 100 per day lottery, Y = 100, so H = 7. Winning the lottery reduces this person's quantity of labor supplied by 5 hours when w = 10.


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

More than one-third of adult Americans are obese. Diseases that kill the largest number of people annually, such as heart disease, cancer, diabetes, stroke, and hypertension, can be attributed to diet.

Did you know?

On average, someone in the United States has a stroke about every 40 seconds. This is about 795,000 people per year.

Did you know?

Not getting enough sleep can greatly weaken the immune system. Lack of sleep makes you more likely to catch a cold, or more difficult to fight off an infection.

Did you know?

Green tea is able to stop the scent of garlic or onion from causing bad breath.

Did you know?

The senior population grows every year. Seniors older than 65 years of age now comprise more than 13% of the total population. However, women outlive men. In the 85-and-over age group, there are only 45 men to every 100 women.

The Procedure Used to Produce Conditioned Emotional Responses The Procedure Used to Produce Conditioned Emotional Responses
Children with attention deficit disorder with hyperactivity (ADHD) diagnoses typically need a quiet, ... Children with attention deficit disorder with hyperactivity (ADHD) diagnoses typically need a quiet, ...
An AC voltage is produced by a magnetic sensor. Most sensors should produce at least 0.1 volt AC ... An AC voltage is produced by a magnetic sensor. Most sensors should produce at least 0.1 volt AC ...
Asomatognosia typically involves damage to the right parietal lobe. Asomatognosia typically involves damage to the right parietal lobe.
Large-scale circulation systems produce global climate patterns Large-scale circulation systems produce global climate patterns
Mg can react with HCl to produce the white solid MgCl2 and H2 gas. A student mixes 1.99 g of ... Mg can react with HCl to produce the white solid MgCl2 and H2 gas. A student mixes 1.99 g of ...
Video: Dendrite Animation

For a complete list of videos, visit our video library