Question: Diana has utility function over goods X , Y that is given by U (X , Y) 2 X %Y%. The prices and income are

Diana has utility function over goods X , Y that is given by U (X , Y) 2 X %Y%. The prices and income are 39;; = 4, 393/ = 16 and I = 160. If the government imposes a sales tax on good X that makes the price of X with the tax equal to p'X = 9. What is the new level of income that will keep Diana's utility unchanged? (a) 160 (b) 180 (c) 200 (d) 220 (e) 240

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