Suppose Lauren is given two options by her employer. First option: She may choose her own hours of work and will be paid the relatively low wage rate implied by budget line HW₁shown in the accompanying diagram. Second option:
She can work exactly HR hours and will be paid the relatively high wage rate implied by budget line HW₂. Which option will she choose? Justify your answer.

Transcribed Image Text:

W2 |W1 12 н Hours Income