An individual's optimal choice for daily free time (t*) is described by the function t*(w, I) = 18 - (2w / I), where 'w' is the hourly wage rate and 'I' is daily unearned income. Assume both w and I are positive values. A student claims that for any positive wage and unearned income, a small increase in the wage rate will always lead to a decrease in the optimal amount of free time. Is this claim true or false?
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An individual's optimal choice for daily free time (t*) is described by the function t*(w, I) = 18 - (2w / I), where 'w' is the hourly wage rate and 'I' is daily unearned income. Assume both w and I are positive values. A student claims that for any positive wage and unearned income, a small increase in the wage rate will always lead to a decrease in the optimal amount of free time. Is this claim true or false?
An individual's optimal daily free time (t*) is a function of their hourly wage (w) and daily unearned income (I). Match each optimal free time function with the correct mathematical expression that represents how t* changes as the wage rate (w) changes, holding unearned income constant.
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