.James has a utility function of the following: U(L, X) = X + Y , where L is leisure and X is consumption. If he works, he receives real wage w. Outside of the labor market, he has non-labor market income V. And his endowment of time, T, is normalized to 1. And the price of goods, p, is also normalized to 1.

(e) Show the solution on the graph, and denote it as e0. And note the indierence curve with optimal solution as IC0.

(f) Now, the wage decrease from 0.8 to 0.5. Draw the new budget constraint. Name it BC1, and show the interceptions on both axises, and show the slope.

(g) Solve for the new optimal hours of working for James, and the optimal consumption