Question: A consumer has the utility function U(X,Y) = X0.3 Y 0.7 . Her income is $60000 and she faces prices Px=6 and Py=7. Would this

A consumer has the utility function U(X,Y) = X0.3 Y 0.7 . Her income is $60000 and she faces prices Px=6 and Py=7. Would this consumer prefer to be taxed on good Y at $3 per unit or a revenue equivalent income tax. Illustrate your answer.

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