Labor Supply. Assume Jamal can work up to 60 hours per week at a rate of $10 per hour, and that because of a government subsidy, Jamal has $200 in unearned income per week. Draw Jamaal's budget constraint showing how much leisure (L) and Consumption (Y) he can have. Label both axes with values and titles. Call this line A. assume that Jamaal is a leisure lover and at his preferred bundle he works for 10 hours. Label this point A and draw an indifference curve for this bundle labeled U(A). How much does he earn? Now assume that the cost of child care foe Jamaal's daughter is $100 per week which he only pays only if he works any hours >0. Re-draw his budget constraint on the same graph and label it Line B. What effect will the cost likely have on the amount of labor Jamaal supplies assuming both consumption and leisure are normal goods?

(3 points) Labor supply. (a) (1 point) Assume Jamaal can work up to 60 hours per week at a rate of $10 per hour, and that because of a government subsidy, Jamaal has $200 in unearned income per week. Draw Jamaal's budget constraint showing how much Leisure (L) and Consumption (Y) he can have. Label both axes with values and titles. Call this Line A. Assume that Jamaal is a leisure lover and at his preferred bundle he works for 10 hours. Label this point A and draw an indifference curve for this bundle labeled UA. How much does he earn? (b) (1 point) Now assume that the cost of child care for Jamaal's daughter is $100 per week which he pays only if he works any hours > 0. Re-draw his budget constraint on the same graph and label it Line B. What effect will this cost likely have on the amount of labor Jamaal supplies assuming both consumption and leisure are normal goods? Talk about this in terms of income and substitution effects. If Jamaal preferred to work 10 hours in the case of no child care costs. how many hours do you think he will work now? (c) (1 point) Now assume that Jamaal's employer is willing to pay $3.33 of Jamaal's child care expenses for every hour he works, but only if he works 30 hours or more. Now re-draw Jamaal's budget constraint and label it clearly as Line C. Given what you drew for your previous indifference curves, how do you think this will affect Jamaal's consumption of