Consider a utility function that is consumption and leisure are perfect complements min(a c, B), where a, 0 (a) Suppose that w 0 and T 0 Determine the consumer's optimal choice of consumption and leisure, and show this in a diagram Show the condition(s) for solutions (7 marks) (b) Derive the labor supply curve (7 marks) (c) Show the change in the labor supply curve if the consumer cares more about consumption i e , increases (6 marks)

Question: Consider a utility function that is consumption and leisure are perfect complements: min(a c, B), where a, > 0. (a) Suppose that w> 0

Consider a utility function that is consumption and leisure are perfect complements: min(a c, B), where a, > 0. (a) Suppose that w> 0 and -T

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a Optimal Choice of Consumption and Leisure Given the utility function U minc l where 0 and the budget constraint wl c wT T where w 0 and T 0 To find ... View full answer

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