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  3. alt alt fn question 2 22 pts consider a representative...

Question: alt alt fn question 2 22 pts consider a representative...

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Alt Alt Fn question 2 (22 pts.) Consider a representative agent with preferences over consumption c and leisure l ue l) = In c + In I. Her budget constraint is c wM, where w is the wage hours worked. The representative agent also chooses how to allocate her time between w activities given her time constraint l + N = h, where h is the total number of hours. represented by rate and N - the number of ork and leisure a) (1 pt.) Combine the budget constraint and the time constraint of single constraint. the representative agent intoa b) (2 pts.) List all endogenous and exogenous variables. c) (1 pt.) Set up the Lagrangean function.

c) (a pt.) Set up the Lagrangean function. d) (3 pts.) Find the first order conditions e) (2 pts.) Use the first order conditions to find an expression for MRScl. Briefly interpret it.

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