Assignment:
Please write your responses in the space provided.
Derive Sarah's labor supply function given that she has a quasilinear utility function, U = Y + 240N0.5and her income is Y = w*H. Use a labor-leisure choice analysis to answer the following?
a. What is her labor supply curve with respect to a change in the wage?
b. If Sarah, won $365,000 a year for life in the state lottery, how would that affect the budget line Draw a complete graph for before and after the lottery.