Graphing daily budget constraint also calculating reservations wage.
Shelly's preferences for consumption also leisure can be expressed as
U(C,L)=(C-200) X (L-80)
This utility function implies which shelly's marginal utility of leisure is C-200 also her marginal utility of consumption is L-80. there are 168 hours in the week available to split between work also leisure. shelly earns $5 per hours after taxes. she also receives $320 worth of welfare benefits every week regardless of describe how much she works.
A. graph shelly's budget line
B. Illustrate what is shelly's marginal rate of substitution Whenever L=100 also she is on her budget line?
C. Illustrate what is shelly's reservation wage?
D. find shelly's optimal amount of consumption also leisure.