Q7 10 Points This problem considers the decisions of a consumer whose preferences are given by u(C,l) =C+41Inl, in which C'is the quantity of consumption and [ is the quantity of leisure. The consumer faces two constraints. The time constraint is given by [ + N* = 1 with IV? as the time spent working (or the labor supply). The main advantage of working is the wages consumers receive. Consumers take wages as given (outside of their control) and obtain wage income equal to wN. The budget constraintis C' = wN? + m T, with 7 as real dividend income and T' as the real lump-sum taxes paid to government. Q7.1 1 Point The rate at which the consumer is just willing to substitute leisure for consumption goodsis ___. Choose the correct one. MRS, c = O MRS, O MRS, = = O MRS =4l E.h W e Q7.2 1 Point If we plot consumption on the vertical axis and leisure on the horizontal axis, the slope of the budget line is equal to _. Choose the correct one. O -1 w O w Save Answer *Unsaved Changes Q7.3 1 Point The utility maximization condition for the consumer is _. Choose the correct one. O MRSlc = w O MRSlc = W O MRSt,c = 1 O MRSto =Q7.4 1 Point Assume w 4. Under this assumption, the optimal number of hours of work (NOT leisure) is ___. Choose the correct one. Of_4 o )1