Elon earns $15 dollars per hour at his job. He has 16 hours per day that he can allocate between work and leisure. Currently, Elon chooses to work 10 hours a day. The federal government passes a law which makes Elon eligible for overtime pay. For every hour per day that he works over 8 hours, he receives $5 extra dollars from his employer. Assume for this problem that even after the overtime law, Elon's boss will still let him work any number of hours from 0 to 16 hours a day.

1.Draw an graph showing Elon's new and old budget constraints. Additionally, include in your graph an example of what Elon's indifference curve would look like before and after the overtime law, if the substitution effect of the law dominates the income effect for Elon.

2.Draw an graph showing Elon's new and old budget constraints (just as you did for question 1). Additionally, include in your graph an example of what Elon's indifference curve would look like before and after the overtime law, if the income effect of the law dominates the substitution effect for Elon.

3.Determine if the following statement is true, false, or uncertain:

Regardless of whether the income effect or substitution effect dominates, it is not possible that Elon's labor supply will fall below 8 hours per day due to the new overtime law.

Group of answer choices

True

False