Suppose we impose a sales tax tau on consumption such that each unit consumption costs left parenthesis 1 plus tau right parenthesis. Everything else equal, what happens to labor supply and why? (Hint: To analyze this question formally, note that with the sales tax, the budget constraint of the household becomes left parenthesis 1 plus tau right parenthesis C equals w left parenthesis h minus l right parenthesis plus o t h e r space n o n l a b o r space i n c o m e. Using this constraint in the consumption-leisure optimization problem described in the slides of Lecture 6, what has to happen to optimal leisure and thereore labor supply such that w equals M R S?) Labor supply shifts right because leisure becomes cheaper relative to consumption. Labor supply shifts left because leisure becomes more expensive relative to consumption. Labor supply shifts right because leisure becomes more expense relative to consumption. Labor supply shifts left because leisure becomes cheaper relative to consumption