Answer to Question #273048 in Microeconomics for Bunny cupcake

Question

Now a government subsidy program lowers the price of X from $20 per unit to $10 per unit.

 

(e) Calculate and graphically show the change in good X consumption resulting from the program.

 

(f) Graphically show the change in consumption attributable to the separate income and substitution effects.

 

(g) Show (graphically) how much the program cost the government. 

Answer 1

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