Suppose That All Workers Place a Value on Their Leisure

question 50

Essay

Suppose that all workers place a value on their leisure of 75 goods per day.The production function relating output per day Y to the number of people working per day N is
Y = 500N - 0.4 N2,
and the marginal product of labor is
MPN = 500 - 0.8 N.
A 25% tax is levied on wages.
(a)How much is output per day?
(b)In terms of lost output,what is the cost of the distortion introduced by this tax?

---

Definitions:

Vagina

The muscular tube leading from the external genitals to the cervix of the uterus in females, part of the reproductive system.

Stratified Squamous Epithelium

A type of tissue composed of multiple layers of flat cells found in areas of the body subject to friction and wear, such as the skin, mouth, and esophagus.

Transitional Epithelium

A form of epithelial tissue capable of expanding and shrinking, situated along the linings of organs like the bladder.

Uterus

A female reproductive organ where a fertilized egg implants and develops into a fetus.