Given the utility function u(c, l) = α log(c) + (1 − α) log(l) and the assumption that the only source of income of the representative consumer is her labor income. In addition, suppose she pays a...


Given the utility function u(c, l) = α log(c) + (1 − α) log(l) and the assumption that the only source of income of the representative consumer is her labor income. In addition, suppose she pays a consumptiontax θ ∈ [0, 1) for every unit of good consumed. Derive algebraic expressions for the optimalleisure and consumption



May 15, 2022
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