1. Explain the concept of non-labour income. Explain using a diagram how an individual worker shifts his or her utility maximization point when he or she receives the non-labour income.
2. Assume the substitution effect dominates the income effect, describe using a diagram the optimum combination of leisure and income of an individual when there is a wage increase.
3. Describe how a worker may achieve utility maximization using budget constraint and indifference curve.