Each person tries to balance his or her time betweenleisure and work. The tradeoff is

Chapter 15, Problem 23

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Each person tries to balance his or her time betweenleisure and work. The tradeoff is that as you work lessyour income falls. Therefore each person has indifferencecurves which connect the number of hours of leisure, l,and income, s. If, for example, you are indifferent between0 hours of leisure and an income of $1125 a weekon the one hand, and 10 hours of leisure and an incomeof $750 a week on the other hand, then the points l = 0,s = 1125, and l = 10, s = 750 both lie on the sameindifference curve. Table 15.3 gives information on threeindifference curves, I, II, and III.(a) Graph the three indifference curves.(b) You have 100 hours a week available for work andleisure combined, and you earn $10/hour. Write anequation in terms of l and s which represents thisconstraint.(c) On the same axes, graph this constraint.(d) Estimate from the graph what combination of leisurehours and income you would choose under thesecircumstances. Give the corresponding number ofhours per week you would work.