3.You are a manager of a small manufacturing plant in a rural area where highly skilled labor is in short supply, despite that your plant currently pays its workers $30/hour. In order to alleviate the problem of skilled labor shortage at your plant, you are considering instituting an overtime plan, where workers earn $30/hour for the first 8-hour work-shift per day and regular hourly wage rate plus 50% of the regular hourly wage rate for each hour worked beyond the regular 8-hour work-shift. Alternatively, you are considering a 50% increase in regular hourly wage for every hour worked by employees. Either plan would eliminate your plant's problem, as production and profit levels are up.

a) With the theory of worker's income-leisure choice (i.e., the theory of consumer behavior application in the labor market), graphically illustrate and carefully explain the impact of an alternative plan on employment and earnings per day at the plant and indicate which plan you would implement, assuming that leisure is a normal good. Clearly indicate the economic benefits of your preferred plan.