I am asked to find an optimal consumption plan for a consumer agent and how many hours he has to work I need help solving this given this information Consider a closed economy with a large number of consumers Each consumer has an initial endowment of 24 hours of time which can be consumed as leisure or sold in the labor market Besides leisure (commodity 1), the consumer also needs food (commodity 2) All consumers have identical preferences, each having the utility function u(x 1 ,x 2 ) x 1 1 2 x 2 1 2 further more I have to identify the labor supply curve for a representative consumer to consider of the minister's claim correct Given this information The Minister of Finance, introduces a tax on wage earnings, demanding that each employee pays 50 in taxes, lowering the after tax wage rate to 50 Commenting on this new taxhe says The economic models used by the economists of my ministry suggest that this tax will not hurt employment, which, I am confident, will remain strong I hope you can help me

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Question: I am asked to find an optimal consumption plan for a consumer agent and how many hours he has to work. I need help solving

I am asked to find an optimal consumption plan for a consumer agent and how many hours he has to work.

I need help solving this given this information:

Consider a closed economy with a large number of consumers. Each consumer has an initial endowment of 24 hours of time which can be consumed as leisure or sold in the labor market. Besides leisure (commodity 1), the consumer also needs food (commodity 2). All consumers have identical preferences, each

having the utility function u(x₁,x₂)=x₁^1/2x₂^1/2

further more I have to identify the labor supply curve for a representative consumer to consider of the minister's claim correct.

Given this information: The Minister of Finance, introduces a tax on wage earnings, demanding that each employee pays 50 % in taxes, lowering the after-tax wage rate to 50. Commenting on this new taxhe says: "The economic models used by the economists of my ministry suggest that this tax will not hurt employment, which, I am confident, will remain strong".

I hope you can help me..

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