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Consider an employee who does not receive employer-based health insurance and must divide her $1,000...

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Accounting

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Consider an employee who does not receive employer-based health insurance and must divide her $1,000 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 $200 per week and the price of other goods" is $100 per week. On the same graph, illustrate how the opportunity set would change if the employer agreed to give this employee $200 worth of health insurance per week (under current tax laws, this form of compensation is nontaxable). Would this employee be better or worse off if , instead of the health insurance, the employer gave her a $200 per week raise that was taxable at a rate of 25 percent? Explain

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