A teenager chooses between leisure and consumption. She earns $1.00 per hour and

has a $10 allowance from her parents.

1.) Construct the budget constraint. Show what happens if the allowance is reduced to

$5.00.

2.) Using convex indifference curves, show that this person chooses not to work.

3.) Now increase the wage to $2.00 per hour. Show that this person works.

4.) Now increase the wage to $4.00 per hour. Show that this person still works, but

less than at a wage of $2.00 per hour.

5.)Graph the labor supply curve.