ECON403, Public Economics

Assignment Help:
Jack and Jill live alone on an island. Their labour supply schedules are identical and given by L = (1 - t)w, where t is the income tax rate and w denotes the wage. Jill''s wage is 6 and Jack''s is 2. The tax paid by an individual is twL and each receives a transfer equal to half the total revenues. Jack and Jill have identical utility functions given by U =C - (1/2)L2
, where C denotes consumption (the individual''s income after tax and transfer). If the social welfare function is W = 3Ujack + UJill, what is the optimal tax rate?

[Hint: Write W as a function of the tax rate t.] Why is the optimal tax rate not 0? Why is
it not 1?

Related Discussions:- ECON403

Factors for evaluating a policy instrument, Normal 0 false fa...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Metals and melting practices - charging, Metals and Melting Practices - Cha...

Metals and Melting Practices - Charging,Coke,Flux,Hearth Charging : An operation in which raw materials are added up to a furnace. Coke : An impure form of carbon that is

Informal regulations on pollution, Normal 0 false false fal...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Comparison of gdp, Normal 0 false false false EN-IN X...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Aspects of environmental functions, Normal 0 false false fa...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Valuation tools - related goods approaches, Normal 0 false fa...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Summary of natural resource economics, Normal 0 false false ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Public economics, explain the stages and various coordination mechanisms in...

explain the stages and various coordination mechanisms involved in policy process?

Related goods approaches - indirect substitute approach, Related Goods Appr...

Related Goods Approaches - Indirect Substitute Approach Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInter

Bowling Alone, What are your thoughts on Putman’s “Bowling Alone,” the idea...

What are your thoughts on Putman’s “Bowling Alone,” the idea that there has been a decline in social capital in North America? Do you agree or disagree with the assertion? Support

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd