Suppose the government wants to limit the amount of Good X that is purchased, so they...

 

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Suppose the government wants to limit the amount of Good X that is purchased, so they enact a program where the price of Good X goes up to $4 for any amount of Good X greater than X-10 units. So Px $2 if X 10, but Px $4 for all units of X purchased where X> 10. Draw the consumer's budget constraint. Be sure that your graph is accurate and carefully labeled. Suppose the government wants to limit the amount of Good X that is purchased, so they enact a program where the price of Good X goes up to $4 for any amount of Good X greater than X-10 units. So Px $2 if X 10, but Px $4 for all units of X purchased where X> 10. Draw the consumer's budget constraint. Be sure that your graph is accurate and carefully labeled.

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IncomeBudget 100 75 50 25 00 25 50 75 100 ... View the full answer