Question

Anya is awake for 100 hours per week.Using one diagram,show Anya’s budget
constraints if she earns $12 per hour, $16 per hour, and $20 per hour. Now draw
indifference curves such that Anya’s labor-supply curve is upward-sloping when
the wage is between $12 and $16 per hour and backward-sloping when the wage
is between $16 and $20 per hour

Answer 1

Given a budget constraint the consumer will maximise utility where the highest indifference curve is tangential to the budget line.