LO 1, 2, 3, 4 Suppose that the government announces a ban on hiring foreign domestic helpers. The representative consumer now has to give up some of her leisure activities to spend more of her time doing housework. Her preference toward the consumption bundle changes and she is now willing to consume less for additional leisure time. Assuming that there has been no efect on real wage (w), taxes

(T), and dividend income, how does this new policy afect the consumer’s choice of work and consumption? Draw a diagram to explain your answer.