theneedtoknow
27th April 2008, 01:34 AM
I need a little help from anyone familiar with Microeconomics. I'm not sure if Economics is a kind of science that fits into this subforum, but none of the other forums seemed any more appropriate. If there is a problem posting here I apologize in advance.
And on to the question...Can someone draw an extremely simple income-leisure choice diagram and show me how to represented progressive tax rates on it? I assume it would just contain a broken budget line getting less and less steep (lower change in after-tax income) the more you substitute leisure with work. I need a confirmation if thats indeed the right way to represent it, as well as some info on what would happen (in terms of indifference curves) with a change in the progressive tax rates (both when the tax rates in all pay grades change, and when the tax rates remain the same but the ranges of the pay grades change). I missed the last week of lectures due to health reasons, and I am studying for my exam but facing a little uncertainty in this particular topic.
And on to the question...Can someone draw an extremely simple income-leisure choice diagram and show me how to represented progressive tax rates on it? I assume it would just contain a broken budget line getting less and less steep (lower change in after-tax income) the more you substitute leisure with work. I need a confirmation if thats indeed the right way to represent it, as well as some info on what would happen (in terms of indifference curves) with a change in the progressive tax rates (both when the tax rates in all pay grades change, and when the tax rates remain the same but the ranges of the pay grades change). I missed the last week of lectures due to health reasons, and I am studying for my exam but facing a little uncertainty in this particular topic.