Suppose an individual earns more than M15 000 in a year and decide to put M10 000 into retirement plan in one year (this year). Assume that he is in the 28 percent marginal tax bracket and interest on the saving is treated as normal. income. If the money saved earns 10 percent annually for 20 years, what will be income available in period 2 (NB: after 20 year assuming annual compounding, (1+r)'))? b. A taxpayer faces the following marginal tax rates for labour income: Average Daily Labour Income (Maloti) ii. 0-20 20-40 4FF 111. 40-80 80 and above Marginal Tax rate (%) 0 20 30 40 The taxpayer can earn M10 per hour. In the absence of any taxes, he would work an average of eight hours a day. Show how the tax affects his income-leisure budget line and analyse the possible effects on his equilibrium allocation of time to work and leisure, assuming that leisure is a normal good. [10] Question 2 Suppose that the supply curve for beer is given by Q = 20+4P and the demand for beer is given by Qd = 50-2P. Suppose further that a tax is imposed on the production of beer of M3 per unit of beer consumed. Determine the following: i. [10] The pre-tax and post-tax equilibrium price and quantity of beer. The tax burden borne by the producer and consumer. The excess burden of the tax imposed on the production of beer. [15]