Solution Hints 1. Let's set up the problem first observe that we can substitute income from work into the utility function, which we then maximize with respect to 4 subject to 4 0: max{(1-4)+0,4} subject to 40 The Lagrangian is: L= (1-4)+w4-14 with the Kuhn Tucker conditions: OL 1 2(1-4)1/2 pal=0 40 0 and It is straight-forward to show that whenever 1/2 we get >1/2 we get j=0 and 1-Hence, labour supply is given for by: (1)= 3 1/2 >1/2