13.1 Suppose there are 8000 hours in a year (actually there are 8760) and that an individual has a potential market wage of €5 per hour.

a. What is the individual’s full income? If he or she chooses to devote 75 per cent of this income to leisure, how many hours will be worked?

b. The person inherits an annual income of €4000. If he or she continues to devote 75 per cent of full income to leisure, how many hours will be worked?

c. How would your answer to part

(b) change if the market wage were €10 per hour instead of €5 per hour?

d. Graph the individual’s supply of labour curve implied by parts

(b) and (c).