B. Albert works for a construction company. He has 70 hours a week available to divide between construction work and leisure, and he has no other sources of income. Albert is allowed to work as many hours (not exceeding 70) as he wishes to. His utility function is U(c; r) = cr where c is his income spent on goods and r is the number of hours of leisure that he has per week.

- Suppose that the hourly wage is w dollars. Find Alberts demand for leisure as a function of w. How many hours will Albert work at wage w?

- Albert is currently being paid $5 per hour. How many hours will he choose to work?

- The company considers to raise Alberts hourly wage from $5 to $10. How many hours will he choose to work at the new wage?

- Assume now that the company oer double payfor overtime. That is, Albert is paid $10 an hour for every hour beyond the amount he chose in part 2. Draw his new budget set and nd the number of hours he will work under this new wage scheme.

- Find the substitution and income eects on leisure if the hourly wage changes from $5 to $10.