Answer to Question #244002 in Microeconomics for amandine

Question #244002

suppose m=30, p1=2, p2=3.

the government wishes to impose a quantity (i.e. per unit) tax of $0.25 on good 1.


1
Expert's answer
2021-09-29T18:20:04-0400

Question

Show the effect of impossing this tax in a clearly labelled graph containing before and after budget lines


Solution

Given

"M=30,P_1=2,p_2=3\\\\Budget\\space line \\\\30=2x_1+3x_2"



Tax of$0.25 on good I will lead to the following

"p_1" becomes "(2+0.25)=2.25"

Budget line

"30=2.25x_1+3x_2"


Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS