A consumer has a choice between two occupations

Reference no: EM131209373

A consumer has a choice between two occupations. One occupation pays a salary of $80,000 but gives no chance for tax evasion. The other pays $75,000 but does permit evasion. With the probability of detection p = 0:3, the tax rate t = 0:3, and the fine rate F = 0:5, which occupation will be chosen if U = Y^½?

Reference no: EM131209373

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