Mr.Cog has 18 hours a day to divide between labor and leisure.If he has 17 dollars of nonlabor income per day and gets a wage rate of 13 dollars per hour when he works, his budget equation, expressing combinations of consumption and leisure that he can afford to have, can be written as
A)R + C/13 = 329.
B)13R +C = 17.
C)C = 251 + 13R.
D)13R + C = 251.
E)C = 302 + 13R.

Question

Mr.Cog  has 18 hours a day to divide between labor and leisure.If he has 17 dollars of nonlabor income per day and gets a wage rate of 13 dollars per hour when he works, his budget equation, expressing combinations of consumption and leisure that he can afford to have, can be written as
A)R + C/13 = 329.
B)13R +C = 17.
C)C = 251 + 13R.
D)13R + C = 251.
E)C = 302 + 13R.

Quizplus · Accepted Answer

Mr. Cog's total income consists of his nonlabor income plus his income from labor (wage rate times hours worked). Since he has 18 hours a day to divide between labor and leisure, if he works R hours, he has 18-R hours of leisure. His nonlabor income is $17, and his wage rate is $13 per hour. Therefore, his total income (consumption, C) can be expressed as the sum of his nonlabor income and his income from labor, which is $17 + $13R. Since he has 18 hours in total, and if he uses R hours for work, the equation representing his budget constraint is C = 17 + 13R, which matches the format of choice D.

MrCog Has 18 Hours a Day to Divide Between