How is it possible for the US to have a higher per capita GDP than Japan or Italy while having only slightly fewer hours of free time per year? Labor productivity (output per hour of work) must be higher in the US than in Japan or Italy. b) How is it possible for Norway to have both more hours of free time and a higher per capita GDP than the US? People in Norway can have a higher GDP per capita and more free time (more goods and more leisure) if labor productivity (output per hour of work) is higher in Norway than in the US. Another possibility is that Norway has an additional source of income, oil exports, which is large relative to the population. 3) The Budget Constraint for the optimal choice model of consumption and free time. Let C = consumption spending per day ($/day) W = wage ($/hour) FT = hours of free time/day. Assume that each of the 24 hours in a day can be spent either in free time (FT) or working. Hence working hours equals 24 - FT which implies that income per day = W(24-FT). Assume that all of income is ?