Question: Consider a one - period static consumption - leisure model. Suppose the individual has the following utility function over consumption c and leisure l :

Consider a one-period static consumption-leisure model. Suppose the individual has the following utility function over consumption c and leisure l: U(c,l)=ln(c)+1.5l.(1) The individuals budget constraint is given by: c=(1-t)wn, where tis the tax rate, wis the real hourly wage rate, and nis the number of hours worked. The total available time is normalized to1,sol=1-n.(a) Set up the Lagrangian for the problem. [1](b) Verify that the consumption-leisure optimality condition is equal to the negative slope of the budget constraint. [2](c) Solve for the optimal values of leisure, labor, and consumption. [2]

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