Friend A and Friend B, both work jobs for 40 hours a week at wage rate w1. If they want to work more than 40 hours per week, they can each take a second job at a wage rate w2 < w1 (they cannot work more than 40 hours per week at their primary jobs).

a. Friend A maximizes his utility by working 40 hours per week. Graph his budget constraint and indifference map, showing that Friend A elects not to take a second job.

b. Friend B is preparing to go to school and is trying to get money to pay for it. Friend B takes a second job. Graph Friend B's budget constraint and indifference map, showing that Friend B elects to take a second job.

c. For both cases, what happens to each friends hours of work when w2 increases?

d. Graphically show what an increase in unearned income does to hours of work in each of the two cases.