Business, 09.03.2021 16:20 kayleetweedy1

Rhoda’s preferences for consumption and leisure can be expressed as U(C, L) = (C - 100) × (L - 40). There are 110 (non-sleeping) hours in the week available to split between work

and leisure. Rhoda earns 10 GHS per hour after taxes. She also receives 320 GHS worth of

support from her parents each week regardless of how much she works.

a. What will be Rhoda’s marginal utility of leisure and her marginal utility of consumption?

(2 Marks)

b. What is Rhoda’s marginal rate of substitution when L = 100 and she is on her budget line?

(3 Marks)

c. Find Rhoda’s optimal amount of consumption.

Someone should kindly help me with this question.

Answers: 2

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Rhoda’s preferences for consumption and leisure can be expressed as U(C, L) = (C - 100) × (L - 40)....