We applied the studied utility maximization framework to the analysis of the individual labor supply, and extended it to include taxation (per-unit and lump-sum). Predictions of this model can be applied to the recent tax increase in the Czech Republic. 

 

 

We further discussed the origin and application of the marginal rate of substitution, compensating and equivalent variations. All of these concepts were covered on intuitive problems and, where necessary, rigorous derivations were presented.