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2. All only likes two goods: x and '1'. He also likes leisure 2 where Z is the number hours of leisure in a week.

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2. All only likes two goods: x and '1'\". He also likes leisure 2 where Z is the number hours of leisure in a week. If he is not enjoying leisure. he is working {Labour L] at $w per hour, and his job is his only source of income. Ali's preferences for goods )1 and Y and for leisure 2 can be represented by the utility function: U = XG'DEYG'WE'J'ST. [In case it is not clear. the exponents for K. Y. and z respectiyely are llEJ CLUB. and {15?}. a. Ali has two constrainls: the usual budget constraint and a weekly time constraint for labour and leisure. What is the weekly time constraint? [2 marks] b. How many hours will Ali choose to work in a week? [10 marksl c. 1|.ii.I'hat proportion of his income does Ali spend on good 3:? [2 marks} d. 1iii.I'hat is Ali's elasticity of demand for good it? {2 markZ}

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