p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; text-align: center; font: 16.0px 'Times New Roman';...

Question

p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; text-align: center; font: 16.0px 'Times New Roman'; min-height: 18.0px} p.p3 {margin: 0.0px 0.0px 0.0px 44.0px; text-align: justify; font: 14.0px 'Times New Roman'; min-height: 16.0px} p.p4 {margin: 0.0px 0.0px 0.0px 0.0px; text-align: justify; font: 14.0px 'Times New Roman'; min-height: 16.0px} p.p5 {margin: 0.0px 0.0px 0.0px 0.0px; font: 14.0px 'Times New Roman'; min-height: 16.0px} li.li2 {margin: 0.0px 0.0px 0.0px 0.0px; text-align: justify; font: 14.0px 'Times New Roman'} ul.ul1 {list-style-type: disc}     Find the optimal consumption bundle when a representative consumer’s utility function is given by and the prices are given by . The income of the consumer is given by . Present your results nicely on a graph with the budget line and the equilibrium point clearly shown.    The governor now proposed a 10% sales tax that affects both the commodities. How will the optimal consumption bundle change after the sales taxes are imposed? Update the graph in Question 1 given the new sets of results.    The leader of the state legislature proposes that the governor’s proposal of a 10% across the board sales tax must be replaced by a 10% income tax. How will the optimal consumption bundle change after the income taxes are imposed? Update the graph in Question 1 and Question 2 given the new sets of results.     A compromise is now reached between the Governor and the Leader of the Legislature. It is decided that there will be a 5% across the board sales taxes and a 5% income tax. How will the optimal consumption bundle change after this compromise is reached? Update the graph in Question 1, Question 2, and Question 3 given the new sets of results.    Consider Questions 2 through 4 and compute the total tax revenue of the government in these scenarios. Present your results nicely in a simple table.    Consider Questions 1 through 4 and compute the total utility of the consumer in these scenarios. Present your results nicely in a simple table.

David · Accepted Answer

Find the optimal consumption bundle when a representative consumer’s utility 
function is given by and the prices are given by . The income of the consumer is 
given by . Present your results nicely on a graph with the budget line and the 
equilibrium point clearly shown.
The governor now proposed a 10% sales tax that affects both the commodities. 
How will the optimal consumption bundle change after the sales taxes are 
imposed? Update the graph in Question 1 given the new sets of results.

p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; text-align: center; font: 16.0px 'Times New Roman'; min-height: 18.0px} p.p3 {margin: 0.0px 0.0px 0.0px 44.0px; text-align: justify; font: 14.0px 'Times New...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment