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3. Person A and B are both lawyers choosing between two career options: associate at a...


3. Person A and B are both lawyers choosing between two career options: associate at a big law firm or a public defender. Ass
Question 14 1 pts From Practice Problem 3d: how much consumption (C) does person B have when they maximize their utility as a
3. Person A and B are both lawyers choosing between two career options: associate at a big law firm or a public defender. Associates must work at least 45 hours per week. Beyond that, they can choose how many hours to work up to a maximum of 120. Their wage is $100 per hour. Public defenders work exactly 40 hours per week and earn $3600 for it. Person A has utility function UA = Le* C and person B has utility function Up = Leº C0.2 where Le is leisure and C is consumption. They both have $100 in non-wage income. (a) Imagine that person A is an associate. How many hours do they choose to work? (b) Which job does person A choose? Use a calculator. (©) Imagine that person B is an associate. How many hours do they choose to work? (d) Which job does person B choose? Use a calcuditor. (@) Think about what this problem is designed to represent: what is the difference between person A and B in terms of marginal utility of leisure? What do some economists. like Goldin, think correlates with marginal utility of leisure? Make an argument for or against this.
Question 14 1 pts From Practice Problem 3d: how much consumption (C) does person B have when they maximize their utility as an associate? 3600 4600 4500 3700
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: 3. (a) utility A: UA = Lec Budget ; c=100(120- Le) +100 Equilibrium: mule = w - MO C L or, E = 100 - - 100 Le from budget:(d) person B chose job public defen der because he has to work less in that case Lees - The mu of leisure for A is lower than() Mility: up = Le Co2 Budget i C: 100(120-le) +100 Equilibrium: Muce = w Muc or Le coz 0.7L coog : 100 or you too Le c = 10L.: Le = 10 , LE 10 .. But the ho associate must work at least 45 howes. Then at curre wage he choses ; 1:45, . ..C: 45 x 1

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