By writing the utility function as U(C, L), the labor supply decision is framed

Question

By writing the utility function as U(C, L), the labor supply decision is framed in

terms of a consumption -leisure choice. Since T = H +L, it is just as reasonable

to formulate the problem as a consumption-hours of work choice by writing the

utility function as U(C, T-L). Depict three indifference curves for the worker

using this formulation. Carefully explain the shape of the indifference curves

with reference the marginal rate of substitution (MRS) and indicate the

preference direction (indifference curves that give higher levels of utility).

Explanation / Answer

https://www.khanacademy.org/science/microeconomics/choices-opp-cost-tutorial/marginal-utility-tutorial/v/indifference-curves-and-marginal-rate-of-substitution

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