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1.(15 percent) Sandy enjoys leisure and the things she can buy with her labour income. Her utility is given by u(C,L) = C^3/4 x L^1/4
1.(15 percent) Sandy enjoys leisure and the things she can buy with her labour income. Her utility is given by u(C,L) = C^3/4 x L^1/4
where L is leisure hours per day and C is her consumption of other goods per day. Sandy's nominal wage is W per hour. The price of consumption is 1. So her daily budget constraint is C=W(24-L) + M
where M is Sandy's non-labour income. Derive Sandy's labour supply curve and graph it when M = 20.
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