An individual's optimal choice for hours of free time per day, t*, is described by the function t*(w, I) = 12 + I / (2w), where w is the hourly wage and I is daily unearned income. Based on this function, which of the following statements correctly analyzes how the choice of free time responds to a change in the wage rate?
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t*, is described by the functiont*(w, I) = 12 + I / (2w), wherewis the hourly wage andIis daily unearned income. Based on this function, which of the following statements correctly analyzes how the choice of free time responds to a change in the wage rate?An individual's optimal consumption,
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