Q.6. 9.12 (0) Wendy and Mac work in fast food restaurants. Wendy gets $4 an hour for the first 40 hours that she works and $6 an hour for every hour beyond 40 hours a week. Mac gets $5 an hour no matter how many hours he works. Each has 80 hours a week to allocate between work and leisure and neither has any income from sources other than labor. Each has a utility function U = cr, where c is consumption and r is leisure. Each can choose the number of hours to work. (a) How many hours will Mac choose to work?. (b) Wendy's budget "line" has a kink in it at the point where r = and c = Use blue ink for the part of her budget line where she would be if she does not work overtime. Use red ink for the part where she would be if she worked overtime. 400 Consumption 300 200 100 0 20 40 60 80 Leisure (c) Find the equations of the red and blue line segments that you drew. (d) If Wendy was paid $4 an hour no matter how many hours she worked, How many hours would she work, and how much would she earn per week? On your graph, use black ink to draw her indifference curve through this point. (e) Will Wendy choose to work overtime?. What is the best choice for Wendy from the red budget line? (c, r) =_ How many hours a week will she work?. (f) Suppose that the jobs are equally agreeable in all other respects. Since Wendy and Mac have the same preferences, they will be able to agree about who has the better job. Who has the better job?_ (Hint: Calculate Wendy's utility when she makes her best choice. Calculate what her utility would be if she had Mac's job and chose the best amount of time to work.)