Essay
Marilyn is a journalist.She is considering two possible jobs.One job is as an editor for a magazine.The other job is writing freelance articles and selling them to whoever will buy them.If she works for the magazine, she must spend 10 hours a day at work and commuting.She will be paid $130 a day net of commuting costs and taxes if she takes this job.If she writes freelance articles, she can work at home and as many hours a day as she pleases.She estimates that she would earn $10 an hour after taxes if she does this.Her utility function is U = (R3)C, where R is the number of hours a day she spends not working or commuting and C is her earnings.
a.If Marilyn chooses to freelance, how many hours will she work?
b.Calculate her utility in each job and identify which job she will choose.
Correct Answer:

Verified
a.6 hours.
b.If she freelances...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
b.If she freelances...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q2: Donald consumes goods x and y.His utility
Q3: Russ Tickman is a dairy farmer.He consumes
Q4: Dr.Johnson receives a lump sum payment of
Q5: Mr.Cog has 18 hours per day to
Q6: Marsha Mellow is very flexible.She consumes x
Q8: Donald consumes goods x and y.His utility
Q9: Peter has an endowment of 3 units
Q10: If a consumer is initially endowed with
Q11: Diana consumes commodities x and y and
Q12: Mr.Cog has 18 hours per day to