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

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.

Correct Answer:

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