If a marginal tax rate of 10 of labor income replaces a


Labor Supply = 10*wage. Labor Demand = 1000/wage

  1. What is the equilibrium wage and labor input?
  2. If a marginal tax rate of 10% of labor income replaces a lump sum tax what is the new labor input and equilibrium wage.

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Basic Computer Science: If a marginal tax rate of 10 of labor income replaces a
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