Marginal Rate of Substitution in Labor Supply
Computing the marginal rate of substitution of leisure for consumption, and comparing it with the real wage to decide whether to work more or fewer hours.
A freelance web developer is paid by the hour. The freelance web developer earns $wage per hour of work, has no other income and spends all earnings on a consumption good that costs $price per unit. The freelance web developer has 16 hours a day to divide between work and leisure. Their utility is U(C, l) = ufunc, where C is the number of units of the consumption good and l the number of hours of leisure per day (a non-linear utility function). The freelance web developer currently works hours hours a day, so the freelance web developer consumes cons units and has leisure hours of leisure. At this bundle, what is their marginal rate of substitution of leisure for consumption, MRS = MU_l / MU_C, the number of units of consumption the freelance web developer would give up for one more hour of leisure? Round to two decimals.
Use it
from datasets import load_dataset
ds = load_dataset("narunraman/steer_me", "mrs_labor_supply")curl "https://steer-benchmark.cs.ubc.ca/api/sample?element_name=mrs_labor_supply&n=5&seed=42"
See the Reference for the parameters.