A and B are both currently single. They are deciding whether or not they should get married and among other things are considering the effect that marriage will have on the quantity of home commodities that they can produce. y of While single, A and Beach face the following budget and time constraints: BC: x = wh TC: 1+h = 1 where h is market hours, w is the market wage and there is a time endowment of 1 unit. If A and B marry, they will face the following budget and time constraints: BCM x = xA + XB = waha+ wghB TC: 1A +hA = I TC: ta + hA = 1 where the superscript M stands for 'married. Now consider, A has a higher market wage than B does: wA = 4wB . B specializes in home production. In the above scenario, the expression for the production function z in terms of wg and t is O 4wa (2 -1)1 Sw (2 – 1)1 O 4wn (2 +1) O 4wa (2 -1)
A and B are both currently single. They are deciding whether or not they should get married and among other things are considering the effect that marriage will have on the quantity of home commodities that they can produce. y of While single, A and Beach face the following budget and time constraints: BC: x = wh TC: 1+h = 1 where h is market hours, w is the market wage and there is a time endowment of 1 unit. If A and B marry, they will face the following budget and time constraints: BCM x = xA + XB = waha+ wghB TC: 1A +hA = I TC: ta + hA = 1 where the superscript M stands for 'married. Now consider, A has a higher market wage than B does: wA = 4wB . B specializes in home production. In the above scenario, the expression for the production function z in terms of wg and t is O 4wa (2 -1)1 Sw (2 – 1)1 O 4wn (2 +1) O 4wa (2 -1)
Chapter7: Uncertainty
Section: Chapter Questions
Problem 7.8P
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Transcribed Image Text:Question 4
A and B are both currently single. They are deciding whether or not they should get married and among other things
are considering the effect that marriage will have on the quantity of home commodities that they can produce.
While single, A and B each face the following budget and time constraints:
BC: x = wh
TC: 1+h = 1
where h is market hours, w is the market wage and there is a time endowment of 1 unit.
If A and B marry, they will face the following budget and time constraints:
BCM: x = x4 + xB = waha + wghg
TC: tA + hA = 1
TC: ta + ha = 1
t = tA+B
where the superscript M stands for `married".
Now consider, A has a higher market wage than B does: wA = 4w'B . B specializes in home production.
In the above scenario, the expression for the production function z in terms of wB and t is
4w B (2 – 1)!
8wB (2 – 1)1
O 4wB (2 + 1)
O 4wa (2 - 1)
Oooo
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