Reference no: EM138858

Q. Consider an employee who does not receive employer-based health insurance and must divide her $700 per week in after-tax income between health insurance and "other goods." Draw this worker's opportunity set if the price of health insurance is $100 per week and the price of "other goods" is $100 for every week. Illustrate On the same graph, how the opportunity set would change if the employer agreed to give this employee $100 worth of health insurance per week under current tax laws also this form of compensation is nontaxable. Would this employee be better or poorer if instead of the health insurance, the employer gave her a $100 per week raise that was taxable at a rate of 25 percent? Explain.