Repeat both parts with a ten percent flat tax

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Suppose the wage is 100 per hour and that the consumer has 100 hours H to work with. Suppose that the MRS is given by c/l. What will the consumer’s choices of c and l be. Repeat with an upper bound of 10 hours. Repeat both parts with a ten percent flat tax. Suppose that the tax rate has two brackets so that income from hours above 1/2H is taxed at 20 percent. How does the solution change?

Reference no: EM131392096

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