question is on the image Consider preferences that can be represented by the fol

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Consider preferences that can be represented by the following utility function; U(C,l) = al + bC, where a and b are positive constants. Leisure and consumption are said to be perfect substitutes for a consumer who has such preferences. Illustrate indifference curves that correspond to such utility function. Why do you think leisure and consumption good are said to be perfect substitutes in this utility function? Do you think it is likely that any consumer would treat consumption good and leisure as perfect substitutes? Given perfect substitutes, is more preferred to less? Do preferences satisfy the diminishing marginal rate of substitution property? If the budget constraint is given by C = w (h - l), determine, graphically and algebraically, what consumption bundle the consumer chooses. Show that the consumption bundle the consumer chooses depends on the relationship between a/b and w, and explain why.

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