We re-visit our perfect substitute problem for the labor supply application.
Suppose that leisure and consumption goods are perfect substitutes. In this case, an indifference curve is described by the equation
u(l, C) = al + bC
where a, b are positive constants.
Graphically shows that the consumer's consumption bundle depends on the relationship between a/b. Briefly explain.
(There are two cases; draw them separately)
[Note that you now have to consider the corner created by the constraint Т.]