Question: Please show process of how to solve question please. Clear and legible writing would be appreciated !!! Consider the following one-period model. Consumer Utility function

Please show process of how to solve question please. Clear and legible writing would be appreciated !!!

Consider the following one-period model. Consumer Utility function over consumption (C) and leisure (L) 1 1 U(C.L) = c?L? Total hours: H = 40 Labour hours: NS-H-L Non-labour income: Lump-sum taxT Hourly wage: w Firm Production function: Y =zF(N) - N Total factor productivitiy z = 2 Government Goverment spending (exogenous): G = 20 Suppose that the total factor productivity. 2. Increases to 5. What is the substitution effect of this wage change on labour supplyiny? . O A -5.51 B.-8.51 C. +5.51 OD. +8.51 E None of the above

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