Let Tom's utility function be U(C, L) =C2+X×L2. Suppose he has 100 hours to split between work and leisure and he has no non-labor income. Derive Tom's optimal choice of consumption and leisure as a function of the wage and X. What is Tom's reservation wage?(Hint:Graphing an indierence curve before solving the problem might be useful.)

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To derive Toms optimal choice of consumption and leisure we need to maximize his utility function su... View the full answer