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The poverty line in this society is atY=C=66. A program is... The poverty line in this society is atY=C=66. A program is proposed whereby a

The poverty line in this society is atY=C=66. A program is...

The poverty line in this society is atY=C=66. A program is proposed whereby a subsidyS=66Yis given to anyone whose incomeYis 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 assumew=10.)

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

UA,before=

UB,before=

UA,after= ?

UB,after= ?

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