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:

Overworked

A condition in which an individual works excessively to the point it negatively affects their health, well-being, and personal relationships.

Service Continuum

The range of offerings companies bring to the market, from the tangible to the intangible or the product-dominant to the service-dominant.

Tangible

Something that can be perceived by touch; having physical form or substance.

Intangible

Something that cannot be touched or physically measured, often relating to non-physical assets or values.