11quiz2Pauley - Name ELEMENTS OF MICRO QUIZ 2 1[25 points...

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Name:________________________ ELEMENTS OF MICRO QUIZ # 2 1.) [25 points] a.) [5 pts.] On the way to work at T-shirt Shop, where she makes $10/hour, Snooki finds $20 on the ground. Draw Snooki’s budget constraint for two goods- leisure and tanning products. Carefully label any intercepts and slopes. b.) [5 pts.] Draw a reasonable indifference curve for Snooki showing her choosing to work 6 hours. How much does she consume? Show graphically. c.) [7 pts.] When Snooki gets to work, her boss, Danny, is shortstaffed and needs more people to work. Danny offers Snooki the option of working after her normal shift (which is 6 hours) for a one time bonus of $10 and $20/hour for the next four hours and $25 for any hours after that. Draw Snooki’s new budget constraint. Also, draw her new indifference curve and show how much Snooki chooses to consume and work now. e.) [8 pts.] The only consumption good Snooki buys is tanning oil. Assume that Snooki chose to work 8 hours and so her income for the week is $130. Next week Snooki knows that her income will be $100.
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