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Suppose your utility function over consumption and leisure is given by U = CL 2 . This means your marginal utility of consumption is L

Suppose your utility function over consumption and leisure is given by U = CL². This means your marginal utility of consumption is L², and your marginal utility of leisure is 2CL.

There are 720 hours in the month that you must divide between labor and leisure. Your hourly wage rate is $24, and you have $200 of non-labor income per month.

What is your reservation wage?

What is your optimal amount of hours of work supplied to the labor market?

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