Question

2. Suppose that a consumer has income of $12 to spend on and r2. Also suppose that the price of 띠 is $2 per unit and the price of x2 is $1 per unit. You will be asked to draw the three budget line in one diagram. Please label each (as (a), (b) and (c) carefully (a) Draw the consumer's budget line on a diagram where a is on the horizontal axis and r2 is on the vertical axis. the same graph as (a). Draw the new budget line on the same graph as (a). (b) Suppose that the government imposes a tax of 50% on z2. Draw the new budget line on (c) Suppose, instead, that the government imposes a lump-sum tax of $2 to this consumer.

Answer 1

lo = 31 per unir 12 au 12 urus 50 a. LHart 410