Jane has standard well-behaved preferences (downward slopping, differentiable andconcave to the origin indifference curves)over consumption and leisure, has a wage of $40 per hour, and has up to 2000 hoursper year to devote to either leisure or wage labor.If Jane faced no taxes, she would find it optimal to work 1000 hours per year.There are two candidates in a presidential election. Candidate 1 for president isconsidering implementing a new redistributive tax system,which would (i) impose a marginal tax rate of 10% on all earned labor income and(ii) give all individuals, regardless of how much they earn, a check for $4,000.Candidate 2 would keep the status quo, without implementing any changes.
Jane will vote for the candidate that maximizes her utility.Would Jane vote for:
A. Candidate 1
B. Candidate 2
C. Indifferent
D. Not enough information to determine