Question: Jesse's utility function is given by U (L, C) = C(L+8). There are 16 hours in a day. His wage is $10/hour and he has

Jesse's utility function is given by U (L, C) = C(L+8). There are 16 hours in a day. His wage is $10/hour and he has $20 non-labor income.

a. Draw his Budget constraint. Label the axis correctly.

b. If the wage changed to $5/hour would Jesse work more or less? Are Leisure and Consumption gross complements or substitutes? Draw his new budget constraint.

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