hello I need help with this question, can you please show the work for each step

Question

hello I need help with this question, can you please show the work for each step, thanks :)

2. a. On a daily basis, a worker named Frank earns non-wage income of $120 and is offered an hourly wage of $20. Frank can allocate no more than 16 hours per day to labor and leisure. How many hours of leisure will Frank be able to enjoy per day if he wishes to earn a total income of $400 per day? Explain. b. Suppose Frank's non-wage income increases to $200 per day. Assuming Frank faces the same hourly wage, how many hours of leisure will he able to enjoy per day if he wishes to earn a total income of $400 per day? Explain. c. As we move from part a to part b, does Frank experience an increase in utility, a decrease in utility, or no change in utility? Explain.

Explanation / Answer

Ans:

a) Total income required = $400 per day

Total hours available = 16 hours per day

Wage rate per hour = $20

Non - wage income = $120

Income from wages to be earned = $400 - $120

= $280

Number of hours to be worked = $280/ $20

= 14 hours per day

Hours of leisure enjoyed per day = 16 - 14

   = 2 hours per day

b)

Total income required = $400 per day

Total hours available = 16 hours per day

Wage rate per hour = $20

Non - wage income = $200

Income from wages to be earned = $400 - $200

= $200

Number of hours to be worked = $200/ $20

= 10 hours per day

Hours of leisure enjoyed per day = 16 - 10

   = 6 hours per day

c) Since the leisure time frank enjoys increases from 2 hours to 6 hours per day , Frank experience an increase utility.

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