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


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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Econometrics: How does a change in the tax rate affect this level of
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