Leo Thinks Leisure and Consuming Goods Are Perfect Complements

question 27

Short Answer

Leo thinks leisure and consuming goods are perfect complements.Goods cost $1 per unit.Leo wants to consume 5 units of goods per hour of leisure.Leo can work as much as he wants to at the wage rate of $15 an hour.He has no other source of income.
a.How many hours a day will Leo choose to spend at leisure?
b.Draw a diagram showing Leo's budget and his choice of goods and leisure.
c.Will Leo work more or less if his wage rate increases?

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Definitions:

Feedback Phase

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