Example 9: Labor - Leisure choice

In this model, the consumer is endowed with 200 units of time. In the benchmark equilibrium, 100 units of time are provided to the market and 100 units are "purchased" by the consumer. This formulation provides an elastic labor supply.
 
 
 Production Sectors Consumers
 Markets | X  Y W | CONS
 ------------------------------------------------------
 PX | 100 -100 |
 PY | 100 -100 |
 PW | 300 | -300
 PL | -40 -60 -100 | 200
 PK | -60 -40 | 100
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Example 9*: Alternative formulation of the example 9

 
 Production Sectors Consumers
 Markets | A B W T | CONS
 ---------------------------------------------------------
 PX | 80 20 -100 |
 PY | 20 80 -100 |
 PW | 300 | -300
 PLS | -40 -60 100 | 
 PL | -100 -100 | 200
 PK  | -60 -40 | 100
 ---------------------------------------------------------
Activity T transforms leisure into labor supply:

PLS - labor

PL - leisure