Please hlep

1. [15 points] Consider Baland and Robinson's (2000) model of child labor done in class (with one sided altruism only): Lp parents, who each have n children, decide on what fraction . of their children's time to use in working, along with their savings decision s and their bequest decision b. Each parent thus chooses s, b and lc to maximize U(c.) + U(C) + now(cc) where co = A+lc - S, Co = A - b + s and cc = h(1 - lc) + b. Let us consider the model for a particular utility and production function, namely when U(c) = In(c), W(c) = In(c) and h(x) = BVx. (a) In this case, determine the efficient level of lc. (b) Determine the level of savings s, bequest b, and child-labor lc chosen by the parents. (c) Under what conditions are s and b both positive? Show that in this case, the level of le chosen is the efficient one that you found in (a). (d) When is s = 0? In this case, find the level of lc chosen and show that it exceeds the efficient level