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EXERCISE 2 A consumer consumes one consumption good :1: and hours of leisure h. The price of the consumption good is 1. The consumer earns
EXERCISE 2 A consumer consumes one consumption good :1: and hours of leisure h. The price of the consumption good is 1. The consumer earns wage rate 3 per hour for the rst eight hours of work, and s' > s for additional overtime hours. He also faces a tax rate per dollar on labor income earned above amount M. Draw the budget set. Update (Jan 27): Assume M
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