Draw indifference curve tangent to the budget line

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Assume that an individual has 80 hours per week that can be distributed between two normal products work and leave ( leisure ) . Draw a bid curve for an individual who can earn a maximum of £ 10,000 per week if the individual does not have any leave ( leisure ) and earns zero kronor if the individual has 80 hours off per week . Draw a indifference curve tangent to the budget line and show how individuals divide their time between work and time off. Suppose now that the salary has increased dramatically, and the individual can earn up to £ 15,000 per week for 80 Timmers work. Analyzing the situation, how the individual will allocate their time. If we now assume that the leave is a inferiorvara to the individual how the individual would divide his time after the salary increase .

Reference no: EM131195534

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