3. In the Harberger two-sector model, with overall supplies of labor and capital fixed and earning rates of return w and r, respectively, labor bears a fraction y of an incremental tax burden A if the ratio R = - WLtys WLtrk + A is unchanged as A increases from its initial value of 0; that is, dR/dA = 0. A. Show that labor's share of the burden, y, equals it share of initial income, wL/(wLtrk), if there is no change in the ratio w/r (i.e., w-r =0 ) as the tax is introduced. B. Suppose that the tax introduced is on capital income in sector X, so that A = TxxrKx. Derive a condition for w-r =0, using the expression for w-r derived in class for this tax experiment. C. Now suppose that on = ox and that sector X uses both capital and labor in production. Show that the condition you derived in part B cannot be satisfied, and hence that w-r > 0: capital's relative share of the tax must be higher than labor's. (Hint: you will need to use the fact that ax = ALXOKX+ AKXO LX)