Assume you can work as many hours per day as you wish at £20 per hour, after tax. You have no other income. You have no

[answerhappygod]

Assume you can work as many hours per day as you wish at £20 per
hour, after tax. You have no other income. You have no ability to
borrow or lend.
a) Show how this information can be used to illustrate a
feasible set, showing the choice between leisure time per day on
the x-axis, and general consumption on the y-axis. Label the axes
and intercepts. Draw some indifferences curves and show where the
optimal point would be.
b) Now a new tax is imposed, which means that your pay after tax
is only £15 per hour. Draw the new feasible set on your diagram,
and find a new optimum. Explain what has happened, and make clear
whether working hours have increased or decreased, and why workers
made this choice.
c) The opposition party criticises the government for this tax
rise, saying that it will definitely decrease the labour force’s
work hours. Comment on this argument.