2. (31 points) For C & L, suppose an individual's utility function can be described as:...

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2. (31 points) For C & L, suppose an individual's utility function can be described as: U(C, L) = C'1/5 L-4/5 (a) (5 points) Calculate the MRS. (b) (5 points) Suppose T = 110 hours and V = $330. What is this individual's reservation wage, Wres? (c) (5 points) Using the previously given values, write down the budget constraint (in terms of C & L) if the market wage rate is $20 per hour (net). (d) (10 points) Given the market wage rate, how many hours will she work? How much will she consume? Be careful: Wres Wmarket. (e) (6 points) On the graph below, draw and label the following: budget constraint, T, V, E, wT+V, and the optimal point of consumption and hours of work (denote it as point P). If points have numerical values, make sure to use them (i.e., the wage rate is $20, so you should use the numerical value.) C ($) L (hrs/wk) 2. (31 points) For C & L, suppose an individual's utility function can be described as: U(C, L) = C'1/5 L-4/5 (a) (5 points) Calculate the MRS. (b) (5 points) Suppose T = 110 hours and V = $330. What is this individual's reservation wage, Wres? (c) (5 points) Using the previously given values, write down the budget constraint (in terms of C & L) if the market wage rate is $20 per hour (net). (d) (10 points) Given the market wage rate, how many hours will she work? How much will she consume? Be careful: Wres Wmarket. (e) (6 points) On the graph below, draw and label the following: budget constraint, T, V, E, wT+V, and the optimal point of consumption and hours of work (denote it as point P). If points have numerical values, make sure to use them (i.e., the wage rate is $20, so you should use the numerical value.) C ($) L (hrs/wk)