Labor Economics 6th Edition by George Borjas

Exercise 4

Cindy gains utility from consumption C and leisure L. The most leisure she can consume in any given week is 168 hours. Her utility function is U(C,L) = C × L. This functional form implies that Cindy's marginal rate of substitution is C / L. Cindy receives $630 each week from her great-grandmother regardless of how much Cindy works. What is Cindy's reservation wage