Need Steps and Explanation:

Dr. No is studying how parents choose to allocate their time over the week between childcare and working. After a preliminary statistical analysis of her data, Dr. No sets upon developing a model to explain her findings. She starts with a crude model featuring only two "goods": childcare (C) and labor (L). In her data, she finds that households able to allocate 100 units of time per week to these two tasks. Each hour spent on childcare consumes one unit of time from that total. Due to commuting and other related tasks, however, it takes, on average, two units of time away from home to devote one additional hour to labor. a) Write the budget equation for childcare and labor. Then draw the budget line (with intercepts, labeled BL) on the axes below. i) Budget Line: b) In describing household preferences, Dr. No decides upon the functional form U = a*C + b*L. After applying her utility function to the data, she determines that a = 2 and b = 1. i) What is the household marginal rate of substitution of childcare for labor? MRS = ii) Solve for the equilibrium levels of household childcare and labor. On the graph below, mark this point A and draw an appropriate stylized indifference curve and label it I. Childcare (C) = Labor (L) = iii) Unhappy with the unrealistic predictions of her model, Dr. No starts again. Which of the following is she more likely to change: the household budget equation or the utility function? Why? L C