1. Robin is a consumer deciding between current and future consumption. He receives income of 30,000 in the current year [t0] but expects to receive no income next year [t1]. The interest rate is 5% per year. Draw and label in full a diagram showing Robins intertemporal budget constraint.
2. Reproduce the diagram that you drew for Question 1 and add to it an indifference map for Robin comprising at least three indifference curves. When drawing the diagram, assume that Robin has patient preferences and explain what this means. Show the intertemporal pattern of consumption that maximises utility and explain why this is unique.
3. In this question we assume that Robin receives income in the current time period only, and is making a decision about how to divide time between paid and unpaid work. To be able to enjoy more income, he has to do paid work for more hours, sacrificing the amount of unpaid time he can have. On the other hand, to enjoy more unpaid time, he must work fewer hours for pay and so earn less. Robins hourly wage is 15, he works for a maximum of 10 hours a day, and he always receives a 20 daily income from state benefits.

   Draw a new diagram that shows Robins budget constraint.

4. • a.Robins hourly wage decreases to 10 an hour. Reproduce your diagram from Question 3; then explain and amend your diagram to show how this decreased wage affects his budget constraint, and the allocation of his time between paid and unpaid work.
   • b.Use the diagram in 4(a) to derive Robins upwards sloping supply curve. Describe the circumstances under which Robin may face a downward sloping labour supply curve.