4. Consider a labour-leisure choice model of Mary. Mary's utility function of leisure L and the . 2 2 2 composite good Y is U(L,
4. Consider a labour-leisure choice model of Mary. Mary's utility function of leisure L and the . 2 2 2 composite good Y is U(L, Y) = 3L3Y3, The marginal utilities are MUL = L 3Y3 and MUY = 2L3Y 3. The hourly wage rate of Mary is w. (1) Write down the equation for Mary's budget line. (2) What is the optimal choice of L and Y that Mary will choose? (3) Will an increase wage w will change Mary's choice of L? What about Y? Use w = 10 and w = 20 to illustrate
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