Draw an indifference curve and budget constraint picture where individuals allocate their time between consumption in...

Draw an indifference curve and budget constraint picture where individuals allocate their time between consumption in dollars based on earnings in the labor market and leisure/home production. Given your drawing, label the optimal consumption levels of market goods and leisure/home production. Show the effect of tax on labor earnings. Draw your picture consistent with a small income effect and a large substitution effect.

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Rahul Sunny answered 8 months ago

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