=+8.9 Policy Application: International Trade and Child Labor: The economist Jagdish Bhagwati explained in one of his public lectures that international trade causes the wage for child labor to increase in developing countries. He then discussed informally that this might lead to more child labor if parents are

“bad” and less child labor if parents are “good.”

A. Suppose that households in developing countries value two goods: “Leisure time for Children in the Household” and “Household Consumption.” Assume that the adults in a household are earning $y in weekly income regardless of how many hours their children work. Assume that child wages are w per hour and that the maximum leisure time for children in a household is E hours per week.