Assume a consumer with the following preferences: U(C,l) = ln(C) + ln(l), where C is consumption, l is leisure, and ln() is the natural logarithm. In addition assume that the consumer can work for wage w=$5, has to pay a lump-sum tax T=$1, and receives profits pi=$2. In addition you know that the maximum amount that a consumer can work or spend on leisure is h=1. Set up the consumer's maximization problem, draw a graph with the budget set, and then solve the problem numerically!! The consumers optimal consumption C*=
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Assume a consumer with the following preferences: U(C,l) = ln(C) + ln(l), where C is consumption, l is leisure, and ln() is the natural logarithm. In addition assume that the consumer can work for wage w=$5, has to pay a lump-sum tax T=$1, and receives profits pi=$2. In addition you know that the maximum amount that a consumer can work or spend on leisure is h=1. Set up the consumer's maximization problem, draw a graph with the budget set, and then solve the problem numerically!! The consumers optimal consumption C*=
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