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Mel can choose to work or enjoy leisure for a total of 14 hours per day. She is considering offers from two firms. Firm A

Mel can choose to work or enjoy leisure for a total of 14 hours per day. She is considering offers from two firms. Firm A pays $12 per hour, and for this job her tradeoff between income (x2) and leisure (x1) is given by the indifference curve x2 = U (x 1)^2 for any given utility level U. The second job pays more at $20 per hour, but the work is less enjoyable and her indifference curve is x2 =U 2x1 (x 1)^2 . Assume Mel has no income other than her wage.

  1. If she was working for Firm A, what would be her optimal number of hours to work?
  2. If she was working for Firm B, what would be her optimal number of hours to work?
  3. If she could work her optimal number of hours in either job, which would she prefer?
  4. If she had to work exactly 7 hours at either of the jobs, which would she prefer?

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