MrCog Has 18 Hours Per Day to Divide Between Labor

question 5

Multiple Choice

Mr.Cog has 18 hours per day to divide between labor and leisure.His utility function is U(C, R) = CR, where C is dollars per year spent on consumption and R is hours of leisure.If he has a nonlabor income of 40 dollars per day and a wage rate of 8 dollars per hour, he will choose a combination of labor and leisure that allows him to spend

• A)184 dollars per day on consumption.
• B)82 dollars per day on consumption.
• C)112 dollars per day on consumption.
• D)92 dollars per day on consumption.
• E)138 dollars per day on consumption.

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Definitions:

Original Investment

The initial amount of money spent to acquire an asset or start a business venture, not including subsequent expenses.

Retail Selling Price

The price at which goods are sold to the public, typically higher than the wholesale price to include profit margin.

Salary Allowances

Amounts allocated in addition to base salary, often to cover expenses such as housing, transportation, or for specific purposes set by the employer.

Capital Balance

The amount of money that a partner in a business has contributed or owns in the capital account.