Problem
Assume that 10 percent of the population will always evade paying taxes no matter what anyone else does. Equally 10 percent of the population will never evade paying taxes. The remaining 80 percent are more likely to evade when the proportion evading increases. Prove that there will be at least one equilibrium level of tax evasion. Show how multiple equilibria can occur. Which equilibria are stable?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.