Andy Has a Utility Function of U(L,C)= (LC)^1/2 where C

question 9

Essay

Andy has a utility function of U(L,C)= (LC)^1/2 where C is units of a composite consumption good (p = 1)and L is hours of leisure per day. Andy is endowed daily with 24 hours of potential working time. He is maximizing his utility at U(L,C)= 20 when he works 14 hours a day. Would he be willing to give up an hour of his leisure to drive Mrs. Doubtfire to the zoo if she offered him $5?

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