Explain clearly

Let U be the expanded utility function of a representative individual i Uit = 511111967: + 32 111(Zt) + 7111(T lt) Here T is the number of hours in a day, y* is the average income of everyone else in the country at the t. The wage rate is the same for everyone given by wt . The income earned by the individual i at time t is the product of hours worked and the wage rate. 51 23,52 =3,7=6,w:5and T224 Q. 14 Now, suppose the central planner allows the individuals to select their own labour input but imposes a taX rate (2) on the wage income which is then redistributed to all the individuals as an average subsidy (3). What should be the optimum tax rate (2*) such that the individual labour choice coincides with the social optimum? Max. score: 4; Neg. score: 0 0.50 0.25 0.33 0.66