Using Figure 7.8 as a starting point, consider the effect of a donut tax equal to $2

Question:

Using Figure 7.8 as a starting point, consider the effect of a donut tax equal to $2 per donut, which increases the price of a donut from $1!to $3. In the figure below, assume that the new (posttax) equilibrium is shown by points e and d. Fill the blanks (shown by horizontal lines) with numbers. The marginal utility per dollar associated with point c is ________ utils. The number of apples associated with point d is ________.

21 Utils 12 1 a 9 Gut-feeling MU per $ MU per $: $2 tax Utils Donuts 12 b 1 d Gut-feeling and cognitive MU