There is a consumer who earns a wage = 3, a profit = 10, and pays...

There is a consumer who earns a wage = 3, a profit = 10, and pays tax at a lump sum value of 46. this consumer values leisure and consumption as perfect compliments subject to

U(c, l) = min(c, l)

There is a maximum of 24 hours per day that consumers can allocate to leisure and/or consumption

1. What is the optimal amount of leisure and consumption that the consumer will enjoy?

2. Draw a graph that includes the budget constraint, the optimal consumption bundle, and three different indifference curves

Expert Solution

Rahul Sunny answered 2 years ago

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