There are 168 hours in a week. Of these, about 60 hours will go to sleeping (mor
ID: 1248582 • Letter: T
Question
There are 168 hours in a week. Of these, about 60 hours will go to sleeping (more or less). That leaves 108 hours for which we have a choice in terms of how we will spend that time. Let’s assume that we will spend the 108 hours in either work or leisure, or some kind of combination of the two.A. What factors would you consider in making the choice of how you will allocate your time between work and leisure?
B. Would these factors change as your earnings increased? As you aged?
The answer needs to incorporate utility maximization. Discussion needs to include how marginal costs and marginal benefits change over time, as well as introducing indifference curves into the answer.
Explanation / Answer
To create a budget constraint you have to set variables So it will be like this. 108= x1+x2, x1 = working hours and x2= leisure hours at your favorite place and with your favorite person. If you know your utility function that will depends on x1 and x2, you will maximize your utility with a buget constraint. So it will be sure that you will be happy without working or staying at home more than 108 hrs.
Yes, it would. Your utility function or indifference curve will shift either to the right or to the left you decided. Happy to work more to the right, happy to have more leisure to the left.Your maximization will also be changed.
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