Suppose Jeri’s weekly utility function can be written as: U= CL – 200L, where C is the amount of consumption (in $) and L is the hours of leisure she gets in a week. Based on this, we know her marginal rate of substitution (MUL/MUC) is equal to(C-200)/L. She can earn a wage of $20 per hour, has 100 hours a week available for labor and/or leisure, and has non-labor income of $400 per week.
Solve to find her optimal decision. How much leisure will Jeri want to take, how much will she want to work, and how much consumption spending will she have if she gets this outcome?