Consider a generic consumption/leisure choice. How will the following events/policies affect either the consumer’s choice of...

Consider a generic consumption/leisure choice. How will the following events/policies affect either the consumer’s choice of hours worked and labor demand, if at all? Be specific as possible about income and substitution effects and if there are multiple cases, consider them all (Your answer should include a graph for all cases.):

(a) A raise in the wage rate

(b) A labor income tax on all income.

(c) A labor income tax on all labor income beyond the first 20 hours.

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Rahul Sunny answered 1 year ago

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