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use an income-leisure diagram to illustrate an individual who is maximising utility working, say, 10 hours per day. now compare the labour supply effects of
use an income-leisure diagram to illustrate an individual who is maximising utility working, say, 10 hours per day. now compare the labour supply effects of an income tax on labour income (i.e. a tax that is the same absolute amount at all levels of earned income) and a wage tax - that leaves the individual indifferent between the two types of tax scheme. assume that the individual considers leisure a normal good.
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