Let’s go back to better times for Radamel, before his injury. Remember he had a monthly allowance of $200 and an hourly wage of $50. Suppose that Radamel’s utility function is U=C^.5L. assume that the total “awake” hours are 110 per week
How many hours will Radamel work in his $30 per hour job? (He still has his weekly allowance of $200).
How many hours will Radamel work in his $30 per hour job after he lost his allowance?