Question 2: Changes in the Budget Set. (25 pts) Consider the following budget set: = 60, 1 = 5 and 2 = 4.

(a) The government of Quebec imposes a quantity tax of 15% on good 1 ( .75$). Show the effect of imposing this tax in a graph. Label your axes and indicate the intercepts. (10 pts) (b) Turns out it was not a good idea! The government of Quebec decides to instead impose a value tax of 15% on good 1. Show the effects of imposing this tax in a graph. Label your axes and indicate the intercepts. (10 pts) (c) Which one is better for the consumer? Explain. (5 pts)