Lecture 4 Labor Suppy 3 corrected notation slides 18-26

Lecture 4 Labor Suppy 3 corrected notation slides 18-26 -...

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EXAMPLE: PROGRESSIVE TAX L (hours) C ($) 180 -9 148 168 The budget constraint is piecewise linear. -8 ܥൌ൜ 10ሺ1 െ 0.1ሻ ൈ 168 െ ܮ ൅ 0 148 ൏ ܮ ൑ 168 10ሺ1 െ 0.2ሻ ൈ 168 െ ܮ ൅ 20 0 ൑ ܮ ൑ 148 20 1364
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EXAMPLE: PROGRESSIVE TAX L (hours) C ($) 180 -9 148 168 Usually, we set MRS = w . . . but which w do we use? -8 1364
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EXAMPLE: PROGRESSIVE TAX L (hours) C ($) 180 -9 148 168 Usually, we set MRS = w . . . but which w do we use? BOTH! -8 1364
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EXAMPLE: PROGRESSIVE TAX L (hours) C ($) 180 -9 148 168 STEP 1: Maximize utility on the extension of the 1 st segment of the BC -8 Segment 1 Segment 2 1364
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EXAMPLE: PROGRESSIVE TAX L (hours) C ($) 180 -9 1512 148 168 STEP 1: Maximize utility on the extension of the 1 st segment of the BC h 1 * -8 1364
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EXAMPLE: PROGRESSIVE TAX L (hours) C ($) 180
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This note was uploaded on 10/28/2011 for the course ECON 440 taught by Professor Brown during the Fall '08 term at University of Illinois at Urbana–Champaign.

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Lecture 4 Labor Suppy 3 corrected notation slides 18-26 -...

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