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Consider an economy in which each unit of labor yields a unit of output. Lisa. the representative consumer, has only one unit of time at

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Consider an economy in which each unit of labor yields a unit of output. Lisa. the representative consumer, has only one unit of time at her disposal. Lisa values consumption and leisure; l-ler preferences are such that, at the margin, she is willing to give up $units of the consumption good for an extra hour of leisure. The government's goal is to set spending, so they represent 40% of national income. Government spending is nanced by a lump-sum tax T. Prot maximization implies that w = 1 and Ir = 0 regardless of the value taken by N. a. Find the maximum consumption level that can be achieved in this economy, given any amount of leisure, and any value of government spending G

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