Question: 1. Solve the firm's maximization problem and derive the labor demand curve in this economy. 2. Set up the Lagrangean of the worker and take

1. Solve the firm's maximization problem and derive the labor demand curve in this economy. 2. Set up the Lagrangean of the worker and take the first-order conditions with respect to labor and consumption 3. Derive the labor supply curve in this economy. 4. Solve for the equilibrium wage rate (w) and employment (number of hours each individual works, h) in this economy. Explain what an increase in the consumption tax from 0 to 25% does to the equilibrium wage and employment. Use a demand/supply diagram to explain the

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