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Unformatted text preview: C. Suppose at age 29 youve spent all thus far so you are only awaiting the 100,000 in 1 year. However, the labor party gets elected and a 25% tax is imposed on unearned income. You can get around this tax by a deal with your trust manager. She will pay you $1,000 per week to chauffer her kids to school. Any money left unearned is subject to the tax. What is the budget constraint for consumption in year 10 vs. bachelor party spending? (Assume 52 weeks in a year and include weeks of work as a variable, along with consumption in period 10 & bachelor party spending.) 3. Question 3.8 parts A & B.a (not part B.b. though you may wish to do part B.b. on your own as it will help you check that you got the right answer). For part A.d. do not give both an intuitive & a graphical answer explain your answer using the graphs only. 4. Question 4.4 part A 5. Question 4.5 parts A.a. & A.d. & B.c. Include the following 3 equations in your analysis of B.c:...
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- Spring '08