Consider two workers with identical preferences. Phil and Bill. Both workers have the same life cycle wage path in that they face the same wage at every age, and they know what their future wages will be. Leisure and consumption are both normal goods.
a. Compare the life cycle path of hours of work between the two workers if Bill receives a one-time, unexpected inheritance at the age of 35.
b. Compare the life cycle path of hours of work between the two workers if Bill had always known he would receive (and, in fact, does receive) a one-time inheritance at the age of 35