Question B

Assume the followings whilst answering the questions:

1. A household spends income between two goods: "leisure/freetime per day" and "consumption per day". While drawing diagrams, please place "leisure/freetime per day" on the horizontal axis and "consumption per day" on the vertical axis.
2. A household's preferences are represented by usual shaped strictly convex indifference curves.
3. "Leisure/freetime" represents the rest of the day from "working time". For example, if a household spends 8 hours on working per day, then they spend 16 hours on leisure/freetime per
4. day. There are 24 hours in a day.
5. Both goods are homogenous and divisible, so that they can both be consumed in fractional
6. quantities.
7. Price of per unit consumption is 1$ and price of per unit leisure/freetime is determined by wage
8. rate, w$.
9. Keep the numbers up to 4 decimal places, e.g., 12.3456

Part (a) Avg. Annual Avg. Annual household Avg. Avg. Avg. free Avg. hrs worked disposable annual time per consumption per employee wage income free time day per day Australia 2009 1,767.00 31,103.00 17.60 6,993.00 19.16 85.21 Australia 2019 1,722.00 41,194.00 23.92 7,038.00 19.28 112.86