3. Budget constraint

Question 3.1: Consider a worker with time endowment T = 16, and non-labor income V = 32. He lives in a country with a progressing tax system where workers with higher earnings have to pay higher wages. In particular, there is a tax on labor earnings of 1 = 0.2 if labor earnings (only labor earnings!) is below 150, and a high tax rate 2 = 0.4 on every additional earnings above 150. Plot the budget constraint for a worker with wage w = 5 and for a worker with wage w = 15.