Dudley's Utility Function for Goods and Leisure Is U(G, L)=

question 21

Short Answer

Dudley's utility function for goods and leisure is U(G, L)= G - (20 - L)(20 - L), where G is consumption of goods and L is the number of hours of leisure per day.Goods cost $1 per unit.
a.If Dudley had an income from nonlabor sources of $25 per day and could work as much as he chose to but would get zero wages, how much would he work?
b.Sketch Dudley's indifference curves on a graph with leisure on the horizontal axis and income on the vertical axis.If Dudley's nonlabor income were $25 a day and he could work as much as he wished for $10 an hour, how many hours a day would he choose to work?

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