Assume function given by a consumer has a utility u(x,y) = x+y with income of $100...

 

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Assume function given by a consumer has a utility u(x,y) = x+y with income of $100 and prices 1, p₂ = 3 P1 P₁ = 1, P₂ . Consider a $1 per-unit tax on good 1. Suppose a lump sum tax raises the same amount of income as the per-unit tax? How much income must it raise? (don't enter the $ symbol) Assume function given by a consumer has a utility u(x,y) = x+y with income of $100 and prices 1, p₂ = 3 P1 P₁ = 1, P₂ . Consider a $1 per-unit tax on good 1. Suppose a lump sum tax raises the same amount of income as the per-unit tax? How much income must it raise? (don't enter the $ symbol)

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With a utility function of uxy xy The consumers budget constraint is p1x p2y I where p1 3 p2 1 and I ... View the full answer