Wage rate w= 10 Pocket money V= 10 from parents Max ln(C)+ln(L) subject to C= 10(15-L) +10 a) Solution? b) What if gov't increases minimum wage to 12?...

u(C,L) = ln(C)+ln(L)

Time endowment T= 24-9 =15

Wage rate w= 10

Pocket money V= 10 from parents

Max ln(C)+ln(L)

subject to C= 10(15-L) +10

a) Solution?

b) What if gov't increases minimum wage to 12?

c) What if gov't provides student subsidy and gives you $20/day for free?

d) What if a recession hits and wage drop to 8?

e) Cutoff wage for positive work?

f) How do they look like on a graph?