Sarah has preferences over consumption and recreation time. She does not have any money endowments or any endowments of the consumption good, but she can work at an hourly wage of w 21320 in order to buy consumption goods at a price of p =1 per unit of consumption. Sarah can, therefore, allocate her time endowment of 24 hours per day between labor supply and recreation. C denotes the quantity of consumption and R denotes the hours spent on recreation. Sarah's preferences are represented by the utility function \"(12.0) = 2mm) + IMC). (3) Suppose Sarah mrks 6 hours and consumes 120 units of the consumption good. Compute the marginal rate of substitution at this time-consumption bundle. Interpret the number you have computed. (b) Find Sarah's demand for recreation and consumption. How many hours will she work? (c) How does the demand for recreation change in response to a change in Sarah's wage? What is the substitution effect for this price change? [4] [5]