Solution: Alice’s utility function is U(C, L) = C 1/2 L 1/3 . Her wages are $15 and she has 20 hours to allocate between work and leisure. Her non-labor
Question: Alice’s utility function is U(C, L) = C 1/2 L 1/3 . Her wages are $15 and she has 20 hours to allocate between work and leisure. Her non-labor income is $30.
- Find her utility maximizing combination of labor and leisure.
- Find her utility maximizing combination of labor and leisure when non-labor income is zero.
- On one graph, clearly label all your answers from parts a and b.
- On the graph, show which effect dominates, the substitution effect or income effect when non-labor income goes from $30 to $0. Very briefly explain.
Price: $2.99
Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document 
![[Solution] Tom earns $15 per hour up](/images/solutions/MC-solution-library-52334.jpg "[Solution] Tom earns $15 per hour up to 40 hours of work each week.")
