Question
The poverty line in this society is at Y = C = 66. A program is proposed whereby a subsidy S = 66 - Y
The poverty line in this society is at Y = C = 66. A program is proposed
whereby a subsidy S = 66 - Y is given to anyone whose income Y is below 66. In order to implement this, money is raised by having a marginal tax rate of 60% for incomes above 100. (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 assumew=10 .) Calculate the Utilities;
a. UA_BEFORE =
b. UB_BEFORE =
c. UA_AFTER=
d. UB_AFTER=
I have been able to solve correctly for UA-BEFORE = 123.5, UB-BEFORE = 31. But I can't find the Utilities after.
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