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A farmer produces goods with the production function x = 10e where e is the amount of time the farmer works and x is the
Posted: Sun Jul 03, 2022 1:02 pm
by answerhappygod
- A Farmer Produces Goods With The Production Function X 10e Where E Is The Amount Of Time The Farmer Works And X Is The 1 (21.2 KiB) Viewed 17 times
A farmer produces goods with the production function x = 10e where e is the amount of time the farmer works and x is the amount of output. The farmer values goods and finds work onerous according to the following utility function: u=y=1/e² where y is the farmer's income. (a) The farmer must pay a fixed rent R to the landowner, and keeps the rest of the output for herself. So the farmer income is y=x-R. The farmer is therefore a residual claimant on her agricultural production. How much labor e will the farmer choose to perform? (Hint: maximize the farmer's utility.) Answer: