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Consider the followingconsumer's problem facing a proportional income tax. Utility function over consumption(C) and leisure(L) U(C,L) = 3ln(C) + 2ln(L) Totalhours: H= 40 Labourhours: NS

Consider the followingconsumer's problem facing a proportional income tax.

Utility function over consumption(C) and leisure(L)

U(C,L) = 3ln(C) + 2ln(L)

Totalhours: H= 40

Labourhours: NS = H- L

Proportional income tax rate= 0.2

Productionfunction: Y= zND

Total factorproductivity: z= 4

The representative consumer maximizesutility, the representative firm maximizesprofit, and the government balances budget. What is the tax revenue atequilibrium?

A.

12.8

B.

9.6

C.

19.2

D.

14.4

E.

none of the above

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