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The poverty line in this society is at Y=C=66. A program is proposed whereby a subsidy S=66−Y is given to anyone whose income Y is below 66. In order to implement this, money is raised by having a marginal tax rate of 60% for incomes above 100. (Assume any budget surplus or deficit on the part of the government is utility-neutral. Assume that the workers can change their time allocations in response to the announced program. Continue to assume w=10.) Calculate the utility levels before and after the program is implemented. 



UA,before=?

UA,before=?

UA,after=?

UA,after=?

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