Mike's utility for consumption and leisure is U(C,L) = C × L so that his marginal rate of substitution between leisure and consumption is C/L. There are 168 hours in the week and he earns $10 per hour.
(a) What is Mike's optimal amount of consumption and leisure?
(b) If the government starts a welfare policy that pays B to all non-workers and pays $0 to all workers, at what value of B will Mike opt out of the labor force in order to go on welfare?