Answer the following questions....

Question 1 5 pts Darla gets her utility from consumption C and leisure L. The most leisure she can consume in any given week is 110 hours. Her utility function is U(C, L) = C x L. This implies that Darla's marginal rate of substitution is C / L Darla receives $750 each week from her grandparents-regardless of how much she works. What is Darla's reservation wage? Edit View Insert Format Tools Table 12pt " Paragraph B I U Av & TV : p 1 0 words > D Question 2 5 pts Moe and Curly both face the same budget line for consumption and leisure. At every possible consumption-leisure bundle on the budget line, Curly always requires marginally more leisure than does Moe in order to be equally happy when asked to forego a dollar of consumption. Using a standard budget line, graph the indiff ence curves for Moe and Curly that shows the optimal consumption-leisure bundle for both people. Which person optimally chooses more consumption? Which feature of Indifference curves guarantees this result? Choose a File D Question 3 5 pts Katie's preferences for consumption and leisure can be expressed as U(C, L) = (C - 80) x (L - 40) This utility function implies that Katie's marginal utility of leisure is C - 80 and her marginal utility of consumption is L - 40. There are 110 hours in he week available to split between work and leisure. Katie earns $15 per hour after taxes. She also receives $200 worth of assistance benefits each week regardless of how much she works. a. Graph Katie's budget line. b. What is Katie's marginal rate of substitution when L = 70 and she is on her budget line? c. What is Katie's reservation wage? 1. Find Katie's optimal amount of consumption and leisure. Upload Choose a File Question 4 5 pts Assume under an income-maintenance program that the basic benefit (income guarantee) is $8,000 and the benefit-reduction rate is 25%. The break-even level of income is: O $32,000 $2,000 $10,667 O $6,000 D Question 5 5 pts Shari can work up to 80 hours each week at a pre-tax wage of $20 per hour but faces a 10% payroll tax. Under these conditions, she maximizes her utility by choosing to work 35 hours each week. The government proposes a negative income tax whereby everyone is given $105 each week, and anyone can supplement their income by working. To pay for the negative income tax, the payroll tax rate will be increased to 25%. a. On a single graph, draw Shari's original budget line and her budget line under the negative income tax. . Show that Shari will choose to work fewer hours if the negative income tax is adopted. c. Will Shari's utility be greater under the negative income tax? Upload Choose a File D Question 6 5 pts The absolute value of the slope of the consumption-leisure budget line is the after-tax wage, w. Other workers earn w for up to 40 hours of work each week, and then w thereafter as at a second job which pays the same hourly wage as than their primary job. a. Assume a worker has 168 hours per week and chooses to work 40 hours at the primary job and does not work at a second job. Graph the worker's budget line and leisure and income at the utility-maximizing level b. Assume the primary employer offers the worker an opportunity to earn time-and-a-half working overtime. The overtime pay kicks in after the employee works 40 hours. Graph the old and new budget line and indicate both the number of hours worked and the income earned. Upload Choose a File