(modiÖed R & G) Suppose the individuals view their loss of income from income taxes as offset by the benefits of pub...
(modiÖed R & G) Suppose the individuals view their
loss of income from income taxes as offset by the benefits of
public services purchased with revenues. How are their labor supply
decisions affected?
(a) Draw the optimal choice of a representative individual in
leisure-consumption space before tax imposition.
(b) Describe the change of budget constraint when the income tax is
imposed and all the
revenue from income tax is returned as the individual's consumption
through public
service provision.
(c) Show the change of optimal choice of the representative
individual.
Homework Answers
Add Answer to:
(modiÖed R & G) Suppose the individuals view their loss of income from income taxes as offset by the benefits of pub...
(modiÖed R & G) Suppose the individuals view their loss of income from income taxes as...
(modiÖed R & G) Suppose the individuals view their loss of income from income taxes as offset by the benefits of public services purchased with revenues. How are their labor supply decisions affected? (a) Draw the optimal choice of a representative individual in leisure-consumption space before tax imposition. (b) Describe the change of budget constraint when the income tax is imposed and all the revenue from income tax is returned as the individual's consumption through public service provision. (c) Show...
Pierre values consuming goods (C) and enjoying leisure (l). Pierre has h = 1 units of...
Pierre values consuming goods (C) and enjoying leisure (l). Pierre has h = 1 units of time to divide between working and enjoying leisure. For each hour worked, he receives w = 1 units of the consumption good. Suppose that Pierre’s preferences are described by the the utility function U(C, l) = C 2/3 l 1/3 . Pierre also owns shares in a factory which gives him an additional π = 0.125 units of income. The government in this economy...
Suppose Tom has a utility function U=C*L C= consumption L= hours of leisure Tom has 100...
Suppose Tom has a utility function U=C*L C= consumption L= hours of leisure Tom has 100 hours to divide between work and leisure per week wage is $20/hr 1. Write down budget constraint in terms of consumption and hours of work 2.Tom make decisions on hours of work, leisure and consumption to max. utility. Explain why we can collapse this problem to one in which he chooses hours of leisure only 3. Find optimal hours of work and total consumption...
2. Capital Tax: In our two period consumption-savings model, suppose that positive interest income in period...
2. Capital Tax: In our two period consumption-savings model, suppose that positive interest income in period 2 is taxed at rate t. Assume that Ao -0, the individual has positive endowment in both periods, and nominal prices for the good remain the same despite the ax (a) Write down the budget constraints in each period and obtain an algebraic expression for his life-time budget constraint. (b) Suppose that at the optimal choice, the representative individual is choosing not to save...
Pierre values consuming goods (C) and enjoying leisure (L). Pierre has h = 1 units of...
Pierre values consuming goods (C) and enjoying leisure (L). Pierre has h = 1 units of time to divide between working and enjoying leisure. For each hour worked, he receives w = 1 units of the consumption good. Suppose that Pierre's preferences are described by the the utility function U(C,)=2/31/3 Pierre also owns shares in a factory which gives him an additional = 0.125 units of income. The government in this economy taxes labour income only and uses the proceeds...
4. A recurring idea in Congress is to move the United States further away from a...
4. A recurring idea in Congress is to move the United States further away from a system of income taxes and towards a system of consumption taxes. A nationwide consumption tax would essentially be a national sales tax, a system that many Western European countries have. It is often referred to as a value-added tax or a VAT Negative consumption is ruled out because it makes no 'economic sense. Zero consumption would be subop timal behavior with either of these...
Need answer to part c please! 2. Inter-Temporal Labor Supply Imagine an individual who lives for...
Need answer to part c please!
2. Inter-Temporal Labor Supply Imagine an individual who lives for two periods (t 1,2) and faces a sequence of wages {W1, W2} that is known with certainty. The individual can borrow and save at an interest rate of r, and has a discount factor of 0 < 1. Each period, the individual has a total time endowment of T. They do not receive any non-labor income, and they do not start life with any...
Labor Economics, multiple choice questions 1. In the leisure-income model, the wage constraint shows a. the...
Labor Economics, multiple choice questions
1. In the leisure-income model, the wage constraint shows a. the points that maximize a worker's utility b. all points that are equally preferred c. the wage rates that affect work decisions d. the available combinations of leisure and income 2. The slope of a wage constraint reflects the: a. rate at which a person is willing to substitute leisure for income c. income effect b. price of leisure d. substitution effect 3. When a...
2. Which of the following is not a likely source of market failure? Asymmetric information Moral...
2. Which of the following is not a likely source of market failure? Asymmetric information Moral hazard Externalities Perfect competition 3. Which of the following categories most accurately describes the Social Security tax in the United States? Proportional Progressive Regressive Value-added tax 4. Which of the following best describes a progressive tax? A tax under which the percentage of income paid as tax increases as income increases A tax under which the percentage of income paid as tax decreases as...
1. Which of the following is most likely to result in a "free-rider" problem? Goods that...
1. Which of the following is most likely to result in a "free-rider" problem? Goods that are overpriced Goods that are nonexcludable Goods that are in limited supply Goods that are sold in monopoly markets 2. Which of the following is not a likely source of market failure? Asymmetric information Moral hazard Externalities Perfect competition 3. Which of the following categories most accurately describes the Social Security tax in the United States? Proportional Progressive Regressive Value-added tax 4. Which of...
2. Capital Tax: In our two period consumption-savings model, suppose that positive interest income in period 2 is taxed at rate t. Assume that Ao -0, the individual has positive endowment in both periods, and nominal prices for the good remain the same despite the ax (a) Write down the budget constraints in each period and obtain an algebraic expression for his life-time budget constraint. (b) Suppose that at the optimal choice, the representative individual is choosing not to save...
Pierre values consuming goods (C) and enjoying leisure (L). Pierre has h = 1 units of time to divide between working and enjoying leisure. For each hour worked, he receives w = 1 units of the consumption good. Suppose that Pierre's preferences are described by the the utility function U(C,)=2/31/3 Pierre also owns shares in a factory which gives him an additional = 0.125 units of income. The government in this economy taxes labour income only and uses the proceeds...
4. A recurring idea in Congress is to move the United States further away from a system of income taxes and towards a system of consumption taxes. A nationwide consumption tax would essentially be a national sales tax, a system that many Western European countries have. It is often referred to as a value-added tax or a VAT Negative consumption is ruled out because it makes no 'economic sense. Zero consumption would be subop timal behavior with either of these...
Need answer to part c please!
2. Inter-Temporal Labor Supply Imagine an individual who lives for two periods (t 1,2) and faces a sequence of wages {W1, W2} that is known with certainty. The individual can borrow and save at an interest rate of r, and has a discount factor of 0 < 1. Each period, the individual has a total time endowment of T. They do not receive any non-labor income, and they do not start life with any...
Labor Economics, multiple choice questions
1. In the leisure-income model, the wage constraint shows a. the points that maximize a worker's utility b. all points that are equally preferred c. the wage rates that affect work decisions d. the available combinations of leisure and income 2. The slope of a wage constraint reflects the: a. rate at which a person is willing to substitute leisure for income c. income effect b. price of leisure d. substitution effect 3. When a...
Most questions answered within 3 hours.
-
If for a test the P-value is between 0.0025 and 0.005, what
conclusion can you draw?...
asked 7 minutes ago -
Using Python. Write a function clean2(aList) that takes a list
of integers aList as argument, and...
asked 13 minutes ago -
Intrapreneurship is defined as the
development of an enterprise culture with an existing (Nandan,
2009). An...
asked 27 minutes ago -
QUESTION 1 Tamiflu is a drug used to treat influenza. A study
found that Tamiflu reduced...
asked 31 minutes ago -
Which of the following would be less likely to be used to
allocate factory overhead when...
asked 37 minutes ago -
Transverse pulses travel with a speed of 195 m/s along a taut
copper wire whose diameter...
asked 35 minutes ago -
Sampling for Engineers Homework question 11.51
Suppose that Y1;Y2;Y3;Y4 denote a random sample from a
Poisson(θ)...
asked 39 minutes ago -
Which of the following is cleaved by regulated intramembrane
proteolysis (RIP)? Select any/all answers that apply....
asked 38 minutes ago -
Random characters You decide to create a program characters.py
that fills a two-dimensional list with random...
asked 51 minutes ago -
What are the major sources of error in your determination of the
molar mass? Select all...
asked 54 minutes ago -
A. Suppose your manager indicates that for a normally
distributed data set you are analyzing, your...
asked 1 hour ago -
During the month of August, the average temperature of a lake
next to a local college...
asked 57 minutes ago