Dudley, in Problem 15, Has a Utility Function U(C, R)

question 5

Multiple Choice

Dudley, in Problem 15, has a utility function U(C, R) = C - (12 - R) ², where R is leisure and C is consumption per day. He has 16 hours per day to divide between work and leisure. If Dudley has a nonlabor income of $30 per day and is paid a wage of $4 per hour, how many hours of leisure will he choose per day?

• A) 9
• B) 7
• C) 8
• D) 11
• E) 10

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Definitions:

Weak Analogy

An argument based on insufficient parallels between two or more entities, which may lead to faulty conclusions.

Circular Argument

A logical fallacy in which the conclusion is supported by premises that assume the truth of the conclusion instead of providing evidence for it.

Hedonic Adaptation

The observed process of people returning to a set level of happiness despite major positive or negative events or life changes.

Natural Selection

A mechanism of evolution where organisms better adapted to their environment tend to survive and produce more offspring, shaping the genetics of populations.