Shari can work up to 80 hours each week at a pre-tax wage of $20 per hour but faces a 10% payroll tax. Under these conditions, she maximizes her utility by choosing to work 35 hours each week. The...

Extracted text: Shari can work up to 80 hours each week at a pre-tax wage of $20 per hour but faces a 10% payroll tax. Under these conditions, she maximizes her utility by choosing to work 35 hours each week. The government proposes a negative income tax whereby everyone is given $105 each week, and anyone can supplement their income by working. To pay for the negative income tax, the payroll tax rate will be increased to 25%. a. On a single graph, draw Shari's original budget line and her budget line under the negative income tax. b. Show that Shari will choose to work fewer hours if the negative income tax is adopted. c. Will Shari's utility be greater under the negative income tax?