Reference no: EM133359352

Steve is age 25 and just finished his MBA, but is not working (assume he could be working between 0 and 60 hours a week for a wage of $25 per hour). Instead, he is living at a major ski area, using the $2,000 per week he receives from his wealthy family. The family, however, seeing that Steve is becoming a permanent slacker, ends this weekly payment. As a result, Steve chooses to take the job that pays $25 per hour and work 30 hours per week. Construct a single income-leisure choice graph and label completely, showing (1) Steve's situation when he was not working and (2) Steve's situation when he is working 30 hours per week. Your graph should include a budget constraint line for each of the two situations, indifference curves, and a labeled utility-maximization point for each of the two situations. Briefly summarize the outcome for hours of work, total weekly income, and Steve's total utility.