3. Assess whether labor supply responds differently to changes in TN and TD. (Take deriva- tives.) Explain your answers in terms of substitution and income effects.Problem 2: Consider a household with preferences u(c, l) = logc + vlog l over consumption c and leisure l, where 0 0 is dividend income. 1. Derive the optimal consumption and leisure decisions as a function of the model param- eters. 2. Show whether labor supply is upward- or downward-sloping in the wage. (Take a deriva- tive.)