Q$.19$ When the wage was $$10$ per hour, a group of workers supplied $30$ hours of work per week on average. The wage then increased to $$12$ per hour, and the same group of workers supplied $33$ hours of work per week on average. What is the elasticity of labor supply for this group of workers?

a$.0$

b$.0\mathrm{.}5$

c$.1\mathrm{.}0$

d$.1\mathrm{.}5$

e$.2\mathrm{.}0$

Q$.20$ The reservation wage likely increases when

a$.$ the price of consumption increases.

b$.$ the wage increases.

c$.$ the price level $($of consumption and wages$)$ decreases.

d$.$ nonlabor income increases

e$.$ one is a discouraged worker.

Part II$.$ This part has $2$ questions worth $20$ points each.

Q$.1$ Shelly's preferences for consumption and leisure can be expressed as

$U(C,L)=(C-100)(L-40)$

This utility function implies that Shelly's marginal utility of leisure is $C-100,$ and her marginal utility of consumption is $L-40.$ There are $110hr$ in the week available to split between work and leisure. Shelly earns $$10$ per hour after taxes. She also receives $$320$ worth of assistance benefits each week regardless of how much she works. $(20$ Points$)$

Graph Shelly's budget line. $(5$ Points$)$

What is Shelly's marginal rate of substitution when $L=100$ and she is on her budget line? $(5$ Points$)$

What is Shelly's reservation wage? $(5$ Points$)$

Find Shelly's optimal amount of consumption and leisure. $(5$ Points$)$