For questions 7 - 12: Ashley's preferences for consumption and leisure can be expressed as U(C,L)=(C50)(L20) This utility function implies that Ashley's marginal utility of leisure is C50 and her marginal utility of consumption is L -20 . There are 100 hours in a week available for work and leisure. Ashley earns $10 per hour. She also receives $350 worth of welfare benefits each week regardless of how much she works. 7. The slope of Ashley's budget line is A. 10 B. 20 C. -10 D. -20 8. When L=90 and she is on her budget line, the marginal rate of substitution is A. 4.92 B. 5.71 C. 6.13 D. 7.44 9. Ashely's reservation wage is A. 3.75 B. 4 C. 4.25 D. 4.5 10. Ashely's optimal amount of consumption is and leisure is A. 650;70 B. 600;75 C. 550;80 D. 500;85 11. If government offers extra $125 subsidy and collects 50% payroll tax, Ashely will labor force and her utility will A. remain in; increase B. remain in; decrease C. exit; increase D. exit; decrease 12. Base on question 11 , if Ashely find a job that offers her $20 per hour salary, the substitute effect of higher income on labor hours is A. 0 hour B. 11.50 hours C. 15.50 hours D. 18.75 hours