1. What is the formula for the time constraint in model of time-constrained consumer choice? What variables go to make up the "full cost" of consuming a commodity in this model? What is the causal link between an increase in the wage women can earn if they go to work outside the home and the decline in family size in America since 1950?

2. (a) A consumer has an income of $1,000. He consumes two goods, x1 and x2. The price of good 1 is $7. The price of good 2 changes from $3 to $5. Is the consumer better off or worse off as a result of this price change, worse off, or equally well off as before? How do you know this?

(b) In addition to the change in the price of good 2, there is a change in the price of good 1, from $7 to $4. Is the consumer better off or worse off as a result of the two price changes? What additional information would you need to know in order to answer this question?

3. What is meant by "willingness to accept"? What is meant by "willingness to pay"? Generally, would you expect them to have the same magnitude? If not, how would you expect them to differ in size? How are they related to consumer's surplus?