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

question 8

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 $10 per day and is paid a wage of $4 per hour, how many hours of leisure will he choose per day?

• A) 7
• B) 8
• C) 11
• D) 9
• E) 10

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Definitions:

Income Taxes

Taxes imposed by the government on the income generated by individuals or entities within its jurisdiction.

Liabilities

Financial obligations or debts that a company owes to others, which must be settled over time through the transfer of economic benefits.

Articles of Partnership

A document that outlines the rules and guidelines for the operation of a partnership, including the responsibilities and profit-sharing among partners.

Capital Balances

The amount of money that partners or shareholders have invested in a company, not withdrawn, and recorded in capital accounts.