Joanne Sleeps Exactly 8 Hours Per Day, and She Devotes

question 63

Essay

Joanne sleeps exactly 8 hours per day, and she devotes the remaining 16 hours to
work (H), golf (x₁)and computer games (x₂). She can work as many hours as she wants at a wage rate of $w per hour. The money price of a round of golf is p1 and the time price is 4 hours. Each computer game takes 2 hours to play and Joanne downloads the game from the internet for free (p₂ = 0). Her utility function is
U(x₁,x₂)= x₁x₂
i)Find the utility maximizing values of x₁ and x₂ as functions of w and p₁.
ii)When w = $10 per hour and p₁ = $40 how many rounds of golf is Joanne going to play? How many computer games? How many hours is she going to work?

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Definitions:

Coma

A state of deep unconsciousness in which a person cannot be awakened, resulting from illness or injury.

Concussion

A form of brain damage resulting from a head impact, fall, or other incident that causes the brain to move forcefully within the skull.

Long-term Storage

The continuous storage of information which can last from days to decades, allowing for the retrieval of memories over a long period.

Network of Associations

A concept in cognitive psychology referring to how ideas or memories are linked together in the mind through shared qualities or experiences.