Jan's Utility Function Is C - H², Where C Is

question 6

Multiple Choice

Jan's utility function is C - H², where C is consumption and H is hours worked per day.She can work in the city for 8 hours per day, earning $100 a day.Alternatively, she can rent a small farm from Mr.Porksniffer.If she rents the farm, she can work as many hours a day as she wishes.If she works H hours per day, she can sell her crops for a total of $20H per day, but she must pay Mr.Porksniffer an annual rent of $R.Mr.Porksniffer wants to charge the highest rent $R that he can and still be able to have Jan rent from him.What is the highest rent he can charge? A penny less than

• A)$100 per day.
• B)$64 per day.
• C)$60 per day.
• D)$50 per day.
• E)$36 per day.

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Definitions:

Human Resource Management

A function in organizations designed to maximize employee performance in service of an employer's strategic objectives.

Accounting Sales

The recorded revenue from goods or services sold or provided to customers, reflecting income generated by a business.

Subsidiary Ledger

A detailed ledger that contains all the transaction information of a specific account, which then summarizes to a general ledger.

Cash Payments Journal

A specialized accounting journal used to record all payments made by a business, including expenses and purchases.