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:

Net Capital Outflow

The difference between the domestic country's total investment abroad and foreign investments within the domestic country.

Argentinean Government

The government or political leadership of Argentina, a country located in South America.

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Failure to repay a loan according to the agreed terms.

Open-Economy Macroeconomic

The study of macroeconomic variables and policies in the context of an economy that interacts freely with other economies, focusing on issues like trade balances and exchange rates.