Sheryl spends all her leisure time and all her money on sailing. She doesn’t value leisure time if she can’t sail, and she can only sail if she has leisure time. Sailboat rentals cost $10 per hour, and Sheryl earns W per hour. She has to decide how to allocate 15 hours per day between work and leisure.
(a) How many hours will she work if she earns $20 per hour?
(b) Find a formula for her labor supply curve.
(c) Graph the labor supply curve.
(d) Is the labor supply curve upward-sloping or downward-sloping? Explain.