Problem 4: Time Allocation with Log-Lin Preferences Robinson has preferences described by the utility function u(c, h) = log c – yh, where c denotes consumption and h hours of work. Assume that the total number of available hours is equal to one so that l+h = 1. The production function is y = Ahº, with 0 < a < 1. (a) What is the optimal choice of hours worked, h*? (b) What happens to h* if A rises? (c) What happens to h* if we increase the value of y?

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