Question: A consumer has preferences described by the utility function u(c, h) = Inc - yh, where c denotes consumption, h E {0, 1} is indivisible

A consumer has preferences described by the utility function u(c, h) = Inc - yh, where c denotes consumption, h E {0, 1} is indivisible labor and y > 0 is a parameter. Assume that the total number of hours available to the consumer is h = 1. The consumer receives the hourly wage w for rendered labor services and has non-labor income . The reservation wage is: me' - 1) w(e' - 1) CY None of the above. 20 . Let WR denote the reservation wage. The labor supply curve is: If w > we. h" = 1; if w s WR. h' = 0 Ch =0 h = 1 None of the above

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