Question: Intermediate Microeconomics question. Please show work and explain. EXERCISE 1 You have an income of $50 to spend on two commodities. Commodity 1 costs $12

Intermediate Microeconomics question. Please show work and explain.

EXERCISE 1 You have an income of $50 to spend on two commodities. Commodity 1 costs $12 per unit and commodity 2 costs $5 per unit. (1) Write down your budget equation. (2) Suppose the government taxes $2 per unit on commodity 1 and %5 per price on good 2. Write down your new budget equation

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