How does a change in the tax rate affect the level of income


Problem

 A consumer with utility function U = Y½  has to choose between a job that provides income Y0 but no possibility of evading tax and a job that pays Y1 but makes evasion possible. What value of Y1 makes the consumer indifferent between these two jobs? How does a change in the tax rate affect this level of income?

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International Economics: How does a change in the tax rate affect the level of income
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