See attached file for full problem description. I also attached the relevant lecture slide.
a. Time can be expressed in monetary terms as an opportunity cost, which often is represented as an hourly wage (Becker 1965). Thus time and money are both mediums of exchange. However, it is noted that people tend to be willing to waste time much more freely than money (see discussion at http://marketing.wharton.upenn.edu/ideas/pdf/Hoch/spending-time-vs-money.pdf)
This could have an impact on the future of the Internet, as people of lower income become the dominant users. Specifically, it would be expected that these people value their time less than those who are highly paid. They will be willing to spend many more hours in search of information, for example. This will dramatically increase Internet traffic. According to Andrew Odlyzko of the University of Minnesota, "The expected rapid but not astronomical growth of Internet traffic is likely to have important implications ...
Economic implications of modern technology based on time money activity perspective.