Consider the following one-period, closed-economy model.

Utility function over consumption (C) and leisure (L)

U(C,L) = C^1/3 L^1/3

Total hours: H = 40

Labour Hours: NS = H - L

Government expenditure = 30

Lump-sum tax = T

Production function: Y = zND

Total factor productivity: z = 3

The representative consumer maximizes utility, the representative firm maximizes profit, and the government balances budget. Suppose there is an decrease in total factor productivity, z, to 2. What is the total effect of this on labour supply?

A.

+2.50

B.

-3.37

C.

+5.87

D.

None of the above

E.

Cannot be determined from the information given