ok.. i couldn't do this question in the exam and it has been haunting me for the past 2 days. so i'm posting it here in the hope that it will stop haunting me. question has been paraphrased.
Take a Robinson Crusoe economy. He has to decide on how much to produce and how much to demand. his production function is x = sqrt(l) and he has only one unit of time, 1. his leisure is denoted as n, and his work is denoted as l. his utility function is u(x,n) = ln(17x) + ln(n).
solve for the competitive equilibrium.
ok.. its out and i shall hope that it stops haunting me.
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