2. On the previous slide we have a budget lines with triangles, circles, diamonds and squares. Say one of the budget lines has wage = 10 and nonlabor income = 0. Another budget line has wage = 7 and nonlabor income = 0. A third budget line has wage = 7 and nonlabor income = 100. A fourth budget line has wage = 10 and nonlabor income = 100. Say the utility function for a person is U = L times C, where C = consumption and L = leisure. For example, if L = 2 and C = 12, then U = 2 times 12 = 24 On the next slide is a table for each budget line. Find the utility for the points that correspond to leisure values 10, 11, 12, through 20 (Note these are note the only points on each budget line and you will have to figure what C is on those points) and say which point on each budget will maximize utility for the person.

3. Square budgetdiamondcircletriangle L C UtilityL C UtilityL C UtilityL C Utility 10101010 11111111 12121212 13131313 14141414 15151515 16161616 17171717 18181818 19191919 20202020 So, on each budget which L, C point gives maximum utility. How much labor will be supplied at each budget?