I2

Billy enjoys his time focusing on his tiktok videos for most of the day. He currently lives off of a large family fund of $2,000/week. Given his education, skills, and past work experience, if he were to get a paying job, it would only pay $10/hr. Answer the following

a. Is Billy part of the labor force & why

b. Illustrate Billy's decision to not work using the labor/leisure model

c. If a new job pops up that pays $30/hr & Billy decides to spend half of his time working; illustrate this change and what does it tell us about his reservation wage

d. If a new job offers $36/hr & the MUL = 3(C/L)(1/4) and the MUC = (L/C)(3/4), what is the budget constraint & optimal level of leisure and consumption given a 120 hour week

e. Given your answers from part d, does Billy care more about spending money in his free time or focusing more on work & why