11.10 Some envelope results 9.10 Young's theorem can be used in combination with the envelope results in this chapter to derive some useful results.

a. Show that al(P, v, w)/avak(P, r, w)/aw. Interpret this result using subtitution and output effects.

b. Use the result from part

(a) to show how a unit tax on labor would be expected to affect capital input.

c. Show that ag/wal/aP. Interpret this result.

d. Use the result from part

(c) to discuss how a unit tax on labor input would affect quantity supplied.