A closed economy one-period macroeconomicmodel with a government taxing a lump-sum taxConsider the following utility function for therepresentative consumerU(c,l) = 2Vc -a(1–1)1.5s.t.c = wN-T1.5Where /is leisure, c es consume, N is the total timededicated to work, l=1-N, T is the lump-sum tax, sogovernment purchases equal taxes G=T, w iswage, and it has the following production functionwith K fixed and equal to 1Y = zN°,5zN0,5Find the Labor supply curve Ns, labor demandcurve Nd, and the optimum wage

Equilibrium in Labor markets is achieved at the point where labor supply and labor demand meet .…

A closed economy one-period macroeconomic model with a government taxing a lump-sum tax Consider the following utility function for the representative consumer U(c,l) = 2Vc – a(1-1)15 s.t.c = wN-T 1.5 Where /is leisure, c es consume, N is the total time dedicated to work, I=1-N, T is the lump-sum tax, so government purchases equal taxes G=T, w is wage, and it has the following production function with K fixed and equal to 1 Y = zN0,5 %3D Find the Labor supply curve Ns, labor demand curve Nd, and the optimum wage

A closed economy one-period macroeconomic model with a government taxing a lump-sum tax Consider the following utility function for the representative consumer U(c,l) = 2Vc – a(1-1)15 s.t.c = wN-T 1.5 Where /is leisure, c es consume, N is the total time dedicated to work, I=1-N, T is the lump-sum tax, so government purchases equal taxes G=T, w is wage, and it has the following production function with K fixed and equal to 1 Y = zN0,5 %3D Find the Labor supply curve Ns, labor demand curve Nd, and the optimum wage

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Consider a single mother with the utility function U = 2/3 log(x) + 1/3 log(), where x is consumption and is leisure. The mother can work up to 100 hours per month. Any of the 100 hours that are not worked are leisure hours. She earns a wage of $10 per hour and pays no taxes. The consumption price is normalized to $1. To be able to work, she has to incur a child care cost of $5 for every hour worked. a. Suppose that there is no tax and welfare benefits. How many hours will she work and what will be her consumption level? Draw the graph depicting her budget set with consumption on the vertical axis and leisure on the horizontal axis. b. Suppose that the government introduces a negative income tax (NIT) that guarantees an income of $200 per month. The benefit is taken away one for one as earnings increase. Draw the new budget set. Compute the new number of hours worked and consumption level. Has consumption increased and is the mother better off? Why or why not? c. Now…
Consider the following Indirect Utility Function U*RM derived from Linear Expenditure System (LES): M – P, B1 - P2 B2 U* = • Derive the Marshallian Demand functions for good X1 and X2
Consider an individual whose utility function is U(C, R) = 2C - (4 - R) 2 where R is the amount of leisure the consumer experiences per day. Suppose that the individual normally sleeps T hours a day, and they can spend the remaining hours between work and leisure. The individual receives an hourly wage of w > 0 and has also an income of Y > 0 a day from non - labour sources. The price of consumption goods is p per unit.
Detailed solution please and asap
Solve for first order conditions of the representative agent. Write down the market clearing condition (resource constraint) for the aggregate economy.
An agent lives for 2 periods and gains utility only by consuming. Future consumption is discounted at rate θ where 0<θ<1. Agent consumes c, saves s at interest rate r in first period of life from income y. In second period agent consumes from savings plus interest earned but must pay a flat fixed tax. Find the Euler equation for this agent and what it shows.
8.1 # 3: SHOW ALL WORK PLEASE. THANK YOU
Assume you can work as many hours you wish at £12 per hour (net of tax). If you do not work, you have no income. You have no ability to borrow or lend, so your consumption, c, is simply equal to your income. Derive and plot the feasible set, between daily values of consumption c, and “leisure”, l. Label the values at the intercepts (the points where the feasible frontier cuts the two axes).
Consider the following one-period model. Consumer Utility function over consumption (C) and leisure (L) U(C,L)= C^(1/2)L^(1/2) = Total hours: H = 40 Labour hours: = H – L Non-labour income: π Lump-sum tax: T Hourly wage: w Firm Production function: Y = zF() = z Total factor productivitiy: z = 2 Government Government spending (exogenous): G = 20 Suppose that the total factor productivity, z, increases to 5. What is the substitution effect of this wage change on labour supply()? A. +8.51 B. -5.51 C. -8.51 D. +5.51 E. None of the above
The one-period model with quasi-linear utility predicts that a decrease in marginal income tax rates could increase tax collection if:Group of answer choices Substitution effects dominate income effects so that the percent change in taxes is greater than the percent change in GDP Substitution effects dominate income effects so that the percent change in taxes is less than the percent change in GDP Income effect dominate substitution effects so that the percent change in taxes is less than the percent change in GDP Income effects dominate substitution effects so that the percent change in taxes is greater than the percent change in GDP
Consider the one-period economy discussed in class. The consumer maximizes a well- behaved utility function U(C, 1) subject to the budget constraint and where leisure is such that l = h - N. Capital is fixed. Firms choose labour to maximise profits subject to the technological constraint Y = zF(K, Nd), where F(K, Nd) is well behaved. Moreover, suppose that to finance the government spending G, the government imposes a tax on firm labour 7 and acquires a lump-sum tax T from the consumer. That is, the firm pays Tw units of consumption goods to the government for each unit of labour and the consumer pays T units of consumption goods. There are no other tax instruments. (a) (10 points) Write down the firm's problem and its first order condition. (b) (15 points) Study the effect of the introduction of the tax on firm labour and provide an economic interpretation. Hint: to study this effect plot the labour demand curves when 7 = 0 and when T > 0 (c) (10 points) Define a competitive…
Consider a representative consumer with preferences over consumption e and leisure I given by u(e,l) = 1/4 * ln(c) + 3/4 * ln(l) Assume that the price of consumption is normalized to p = 1 and the consumer has h = 24 hours of total time available to divide between work and leisure. The consumer's wage per hour of work is w = 24 The consumer also receives dividend (profit) income of pi = 39 and pays lump-sum taxes of T = 7 (a) Write out the consumer's budget equation, and draw a graph of the budget constraint. (b) Solve for the optimal decisions e and 1. How many hours per day is the consumer working? (c) Suppose the consumer's wage decreases to w = 16 Solve for the new optimal choices of c and I". Relative to the solution in part (b), do consumption, leisure, and hours worked increase, decrease, or stay the same? Give an intuitive explanation for why these changes occur. (d) When the wage changes in part e, determine whether the consumer experiences an income effect, a substitution…