Multiple choice

With 50% chanceJeb's earnings will be Y=100 and with 50% chanceJeb's earnings will be 225. Suppose there are two tax systems: System F: a flat income tax rate of 20% System P: a progressive taxation system such that the marginal tax rate is 10% for income no higher than 100; and 36% for income higher than 100. Supposeleb's utility function is U(C) = \\l C and his consumption would be equal to his after-tax income. Which of the following statements is correct? 0 Jeb's indifferent between tax system F and tax system P because he would have the same expected aftertax income. 0 Jeb's the expected after-tax earnings under tax system P is $130. 0 Jeb's the expected aftertax earnings under tax system F is $135. 0 Jeb's utility function suggests that consumption gives him constant marginal utility