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b) Firm Problem: Write an equation for the rm's prot maximization decision assuming that the rm takes the wage as given. Choose labor to maximize rm prots and solve for labor demand. Explain how an increase in Government expenditure (i.e., an increase in tax rate on revenue) affects labor demand. (15 points) Assume that output (Y) in the economy is given by a Cobb-Douglas production function, Y = zKaN1-a where z represents total factor productivity, K is the fixed capital stock, and N is labor. Utility is given by U = In(C) + blnl, b > 0 where C is consumption, and 1 denotes leisure. Government collects taxes by taxing the firm's revenue at a flat rate of t. (After-tax revenue for the firm is (1 - t) Y). The government uses the tax to fund its expenditure G = tY, and consumers do not value G. Assume that initially G = tY = G1