Suppose country A has the following system of taxes/transfers:ANAL(a) Income <= 100: Subsidized at 20%.MATH(b) Income between 100 and 200: Exempt from taxes.PART(c) Income>200: Taxed at 40%.In this country, we assume that everyone receives 5 per hour as wages. A worker chooses how many hours she wants to work. Her preferences over aggregate consumption, c, and41abor, I, are represented by the following utility functionU(c, 1) =c+0ln(31-1)where 0 is a parameter reflecting drudgery of work (i.e. how painful the work is). Assuming 0 = 60 for the worker and given the system ofaxes/transfers, what is her optimal choice of labor?A1=21B1 20C1* = 19D1*=224855

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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The table below shows the data for the country of Magnolia. Complete the national income accounting framework by filling in the missing data. Remember to enter a minus (-) sign to indicate negative values. Expenditures Consumption Gross investment Government spending Net exports Gross domestic product at market prices 100 Less depreciation Less indirect taxes (net of subsidies) Net domestic product at basic prices +/- net foreign factor income Net national product at basic prices 320 350 30 260 50 160 70 1100 220 100 -10 780 320 06 160 130
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