Fred Has Just Arrived at College and Is Trying to Figure

Essay

Fred has just arrived at college and is trying to figure out hoe to supplement the meager $50 a week checks that he gets from home. The amount of leisure time that has left after allowing for necessary activities like sleeping, and studying economics class is 50 hours a week. He can work as many hours per week at a nearby Taco Bell for
$5 an hour. Fred's utility function for leisure and money to spend on consumption is U(C,L)=CL.
a)Write down Fred's budget constraint for leisure and consumption. Draw the corresponding budget line on a diagram with leisure on the X- axis.
b)Sketch Fred's indifference curves.
c)Find the optimal bundle. That is: find the bundle of leisure and consumption that maximizes Fred's utility.
d)Find the optimal labor supply. That is the number of hour Fred chooses to work in Taco Bell.