How does a change in tax rate affect this level of income

Reference no: EM131204206

A consumer with utility function U = Y½ has to choose between a job that provides income Y₀ but no possibility of evading tax and a job that pays Y₁but makes evasion possible. What value of Y₁ makes the consumer indifferent between these two jobs? How does a change in the tax rate affect this level of income?

Reference no: EM131204206

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