5.Jesse's utility function is given by U (L, C) = C(L+8). There are 16 hours in a day. His wage is $10/hour and he has $20 non-labor income. (10 points)

a.Find the budget constraint and then the optimal number of hours he should spend in Leisure (L).

b.Draw his Budget constraint. Label the axis correctly.

c.Is it possible for Jesse to consume $100 and have 10 hours of leisure? Explain.

d.If the wage changed to $5/hour would Jesse work more or less? Are Leisure and Consumption gross complements or substitutes? Draw his new budget constraint.

e.Using the optimal amount of work from parts a. and c., what is the elasticity of Jesse's labor supply? Is Jesse's labor supply elastic?