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Marilyn Is a Journalist

Question 7

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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.

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a.6 hours.
b.If she freelances...

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