What is your reservation wage


Assignment task: Suppose your utility function over consumption and leisure is given by U = CL2.  This means your marginal utility of consumption is L2, and your marginal utility of leisure is 2CL.

There are 720 hours in the month that you must divide between labor and leisure. Your hourly wage rate is $24, and you have $200 of non-labor income per month.

What is your reservation wage?

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Macroeconomics: What is your reservation wage
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