Shelly’s preferences for consumption and leisure can be expressed as U(C, L) = (C – 100) * (L – 40). This utility function implies that Shelly’s marginal utility of leisure is C – 100 and her marginal utility of consumption is L – 40. There are 110 (non-sleeping) hours in the week available to split between work and leisure. Shelly earns $10 per hour after taxes. She also receives $320 worth of welfare benefits each week regardless of how much she works.

(a) Graph Shelly's budget line.
(b) What is Shelly's marginal rate of substitution when L=100 and she is one her budget line?
(c) What is Shelly's reservation wage?
(d) Find Shelly's optimal amount of consumption and leisure.