Consider a utility function:U(c,l)=(1)log(c)+log(l),where >0.

(a)Suppose that the consumer has one unit of time,w= 0.75,= 0.8, andT= 1.0. Determine the consumer's optimal choice of consumption and leisure, and show this in a diagram.

(b)Now suppose that wage double,i.e. w= 1.5. Again, determine the consumer's optimal choice of consumption and leisure. Use a graph to show how and why the consumer's optimal consumption bundle changes, with reference to income and substitution effects.