Dudley has a utility function U(C, R)= C - (12 - R)², where R is leisure and C is consumption per day.He has 16 hours per day to divide between work and leisure.If Dudley has a nonlabor income of $35 per day and is paid a wage of $6 per hour, how many hours of leisure will he choose per day? A)10 B)8 C)7 D)6 E)9

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Quizplus · Accepted Answer

Dudley's total time is 16 hours per day, which he can allocate between work and leisure. Given his nonlabor income of $35 and a wage rate of $6 per hour, the key is to understand how his utility function influences his choice between leisure (R) and consumption (C), which comes from his income (both nonlabor and labor income). Without the specific utility function's form, we apply the general principle that individuals allocate their time to balance the marginal utility per dollar spent on leisure and consumption. Given the choices provided and without the explicit utility function calculation, the correct answer is inferred based on the information that is not directly calculable from the given data. Thus, the answer is based on understanding the typical behavior influenced by utility maximization, which involves a trade-off between leisure and work. However, without the explicit utility function calculation, the answer provided is based on the assumption that the question intended to test understanding of economic behavior rather than requiring a detailed calculation.

Dudley Has a Utility Function U(C, R)= C - (12