The Democratic People's Republic of Gruberland has two workers in its economy: worker A and worker B. Workers choose a combination of leisure and consumption to maximize their utility. The individual utility functions are as follows:

_A=^7/81/8

_B=^1/2+(30)^1/2

where stands for consumption, and stands for leisure. Any given worker is constrained by a maximum of24 hours of leisure, or a maximum of24 hours spent working for an hourly wage,. One unit of consumption costs $1 and =10.

C_A=210 and Z_A=3

C_B=60 and Z_B=18

The poverty line in this society is at==66. A program is proposed whereby a subsidy=66 is given to anyone whose income is below66. In order to implement this, money is raised by having a marginal tax rate of60% for incomes above100. (Assume any budget surplus or deficit on the part of the government is utility-neutral. Assume that the workers can change their time allocations in response to the announced program. Continue to assume=10.)

Calculate the utility levels before and after the program is implemented.