Designing an Indifference Contract
An individual's well-being is determined by their daily free time (t) and consumption (c), represented by the utility function U(t, c) = t + 2√c. Their alternative to accepting any work contract is a government assistance program that provides them with 9 hours of free time and 16 units of consumption.
Propose a new work contract, defined by a specific combination of free time and consumption, that would leave this individual exactly indifferent between accepting the contract and taking the government assistance. Your answer should specify the hours of free time and units of consumption in your proposed contract, and briefly explain how you arrived at this combination.
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Economy
Introduction to Microeconomics Course
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CORE Econ
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Designing an Indifference Contract