Question: A representative consumer has preferences described by the utility function: u(c,h) = lnch, where c denotes consumption, and h hours worked. Assume that the total

A representative consumer has preferences described by the utility function: u(c,h) = lnch, where c denotes consumption, and h hours worked. Assume that the total number of hours available to the worker are h = 1. The consumer/worker receives the wage, w, for her labor services.

A. Obtain the labor supply curve.

B. Introduce a proportional tax on labor income, w. Obtain the new labor supply curve.

C. Introduce a proportional tax on consumption, c. Obtain the new labor supply curve.

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