An agent consumes goods a and y, with prices Pa = $5 per unit and Py...

 

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An agent consumes goods a and y, with prices Pa = $5 per unit and Py = $8 per unit. The consumer's income is I = $48. The government imposes a tax of $1 per unit on good r. What is the new equation for the budget constraint? a) y = 6 – (5/8)x b) y = 6 – 0.75x C) y = 8 – (6/8)æ d) y = 48 – 8x An agent consumes goods a and y, with prices Pa = $5 per unit and Py = $8 per unit. The consumer's income is I = $48. The government imposes a tax of $1 per unit on good r. What is the new equation for the budget constraint? a) y = 6 – (5/8)x b) y = 6 – 0.75x C) y = 8 – (6/8)æ d) y = 48 – 8x

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Ans Given Px 5 per unit Py 8 per unit Consumers incomeI 48 Government imposes tax ... View the full answer