Question 2: Consider an individual with a utility function U(x,, x,) = yx, + x,. Their income 18 = 5140, The pre-tax market prices they face are p; = 35 and p: = 57 Suppose a unit tax of $0.25 is introduced on good 1, that the statutory incidence of the tax is on firms, that firms are perfectly competitive and that firms are perfectly elastic in their supply of both goods. Derive the uncompensated demand functions for @, and xz. What 15 the compensated own-price elasticity of demand for good 17 Calculate consumer surplus before and after the tax 15 imtroduced. Calculate the revenue generated by the tax. Calculate the excess burden (EB} from this tax. RS e