1. First suppose that there is no income tax. Kitty, has an hourly wage of $8. a. Graph the labor supply decision for Kitty on an income-leisure graph. Let the number of hours to be divided between labor and leisure be 20 (24 hours a day minus 4 hours of sleep). Be sure to label the axes and the slope. Draw her indifference curve such that she works 8 hours a day. b. Now, suppose that a new leader takes over and she implements the following income tax (with respect to daily income for consistency): Bracket Earnings Tax rate on earnings in bracket 1 $0 - $60 12% 2 $60 20% Again, use an income-leisure graph to graph the labor supply decision for Kitty, but include both her before-tax and after-tax budget constraints (label axes and slope). Draw her new indifference curve such that she now works 10 hours a day. c. How is it possible for Kitty to increase her hours worked after a tax? (hint: leisure is a normal good) d. If Kitty is working 16 hours a day at a wage of $8 per hour, how much does she pay in taxes (daily)? What is her average