Consumer optimal choice of consumption bundle

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1. Say that a person faces a choice between two goods, leisure (good 1) and money (good 2). The price of leisure is the wage w = 10 and the price of money is p = 1. They have 10 available hours that they can allocate as they wish between leisure or working for wage, and they also have $50 in non-labor income. Their utility function is u = Lc^4 .

a) Sketch this person's budget constraint.

b) What is this consumer's optimal choice of consumption bundle? How much do they choose to work?

Reference no: EM132649148

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