Consider workers who are able to choose their weekly work hours, in the standard setup of the neoclassical model of "daily" labor supply. The horizontal axis shows up to 16 daily hours that the worker can allocate to leisure or work. Time spent commuting to work is time that is not enjoyable. With the right podcast or talk radio, it might be less awful, but let us model commuting time as a net loss of leisure time that is not formally compensated through work. Consider workers who live around a metro area called the San Bnzet Bay Area, who must spend 2 hours each day commuting around a large bay if they choose to work any amount of time, and there are no alternatives to commuting if any work is chosen. This hour of commuting is not paid, and the worker cannot telecommute. (Perhaps they work at Elon Musk's Twitter.) But if the worker chooses not to work, they do not commute and do not spend time commuting. All workers receive the same moderately small amount of daily nonlabor income Y, perhaps $75, which creates a \"kink" in the budget constraint in the usual way. Now imagine that policymakers propose building a new bridge over San Bvvwzl Bay, which will cut the daily commute time roughly in half. The proposal envisions funding the bridge with a large philanthropic donation, so it would come with no user fees (i.e., tolls) nor tax increases. (a) Before starting on this analysis, briey explain what you think the impact of the new bridge would be on local labor supply. Would it increase labor supplied, reduce it, or not affect it? [No answer is incorrect. We will return back to this answer in order to examine how your intuition held up. | suggest you just write your honest \"hot take" on this question here.] (b) Draw a budget constraint that shows leisure time (x) versus money income (y), showing the time cost of commuting, which is only relevant for workers who work strictly positive hours, and a wage rate w. Assume potential workers have 16 hours of daily time to split between leisure and work. Depict the budget constraint without the bridge, when the time cost of commuting is relatively large. (0) Describe the two broad types of optimal labor supply choices that are likely to emerge with this budget constraint. In other words, there should be two qualitatively different spots on the budget constraint where two different sets of indifference curves are tangent. Identify and briey discuss them. (d) Take the perspective of a worker who supplies some labor to the market under the large, pre-bridge commuting time costs. Now consider what might happen when the bridge is built and commuting time costs are halved. Draw two budget constraints and two indifference curves below. (e) Describe what you have drawn. What happens to hours of labor supplied by this class of worker when the bridge opens? Discuss income and/or substitution effects. (f) Take the perspective of a worker who supplies N0 labor to the market under large, pre-bridge commuting time costs. Now consider what might happen when the bridge is built and commuting time costs are halved. Draw two budget constraints and two indifference curves below. [Hint: the bridge is also likely to affect this class of worker as well, except under extreme assumptions about their indifference curves] (g) Describe what you have drawn. What happens to hours of labor supplied by this class of worker when the bridge opens? Discuss income and/or substitution effects. (h) Return to your answer to part (a) and compare and contrast what you started then with what you have found in parts (b)-(g). Remember: no answer to part (a) can be wrong. But you may nd that your earlier intuition was either incomplete or incorrect. (i) Based on everything you have done up to now, write a short policy brief to the political leaders of the San Bnzet Bay Area about the bridge project. To gauge the impact, what might be important to know about the local prime working-age (25-64yo) population