Labor supply. Assume that the agents need to choose between leisure and consumption. "Awake" hours not dedicated to leisure are dedicated to work for which the agent getsw. Also, unless indicated otherwise, assume that the total "awake" hours are 110 per week.

Radamelhas an investment for which he receives $200 weekly. His wage is $50 per hour.

Let's go back to better times forRadamel, before his injury. Remember he had a weekly allowance of $200 and an hourly wage of $50. Suppose thatRadamel'sutility function is UR = C^05L

After a complex treatment,Radamelwas cured from his sleeping sickness, bringing his total "awake" hours back to 110. Now analyze his optimal choice after his injury.

• How many hours willRadamelwork in his $30 per hour job? (He still has his weekly allowance of $200).
• How many hours willRadamelwork in his $30 per hour job after he lost his allowance?

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