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

question 7

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 $15 per day and is paid a wage of $8 per hour, how many hours of leisure will he choose per day?

• A) 5
• B) 6
• C) 7
• D) 9
• E) 8

---

Definitions:

Fixed Equipment

Assets that are installed or fixed in place and cannot easily be moved, typically essential for operational purposes in facilities.

Raw Materials

Basic materials from which products are made, typically unprocessed or only minimally processed states of resources used in production.

Component Parts

Individual pieces or elements that are assembled to form a finished product.

Production Goods

Products and materials that are used in the manufacturing process to produce the final goods for consumption or sale.