Question
Antech must decide how to allocate her labor, weighing options between hours of leisure and acquiring consumption items. Her choices over these combinations are consistently
Antech must decide how to allocate her labor, weighing options between hours of leisure and acquiring consumption items. Her choices over these combinations are consistently rational. She doesn't have any income outside of her work. She has a total of T hours at her disposal and must decide the number of hours she wishes to commit to her job, given her hourly pay. Each consumption good is priced at p = 1 unit. Initially, her wage is set at wL > 0. Later on, her wage increases to wH, which is greater than wL. Following this wage increase, Antech decides to work additional hours. Can you illustrate this scenario with a graph showing two budget constraints (clearly marking the points where they touch the axes) and pinpoint two optimal decisions (each from its respective budget set)?As an microeconomist, provide a concise explanation of how the depicted budget constraints and choices mirror the provided details.
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