At a price of $1 each, Luciana (an average Bloomington resident) consumes 100 32-ounce sodas per year. Concerned that so much soda consumption may contribute to poor health, the Bloomington Mayor proposes a $0.20 tax on sodas. To avoid losing voters, the Mayor simultaneously proposes mailing a check for $20 to each Bloomington resident. As a result of these two policies, we predict (using the standard consumer choice model) that • Luciana's soda consumption will [Select] • Luciana will be [Select] • The government will collect [Select] from Luciana through the soda tax.
At a price of $1 each, Luciana (an average Bloomington resident) consumes 100 32-ounce sodas per year. Concerned that so much soda consumption may contribute to poor health, the Bloomington Mayor proposes a $0.20 tax on sodas. To avoid losing voters, the Mayor simultaneously proposes mailing a check for $20 to each Bloomington resident. As a result of these two policies, we predict (using the standard consumer choice model) that • Luciana's soda consumption will [Select] • Luciana will be [Select] • The government will collect [Select] from Luciana through the soda tax.
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.11P
Related questions
Question
![At a price of $1 each, Luciana (an average Bloomington resident) consumes 100 32-ounce sodas per
year. Concerned that so much soda consumption may contribute to poor health, the Bloomington
Mayor proposes a $0.20 tax on sodas. To avoid losing voters, the Mayor simultaneously proposes
mailing a check for $20 to each Bloomington resident.
As a result of these two policies, we predict (using the standard consumer choice model) that
• Luciana's soda consumption will [Select]
• Luciana will be [Select]
• The government will collect [Select]
✓from Luciana through the soda tax.
At a price of $1 each, Luciana (an average Bloomington resident) consumes 100 32-ounce sodas per
year. Concerned that so much soda consumption may contribute to poor health, the Bloomington
Mayor proposes a $0.20 tax on sodas. To avoid losing voters, the Mayor simultaneously proposes
mailing a check for $20 to each Bloomington resident.
As a result of these two policies, we predict (using the standard consumer choice model) that
• Luciana's soda consumption wil✓ [Select]
decrease
• Luciana will be [Select]
increase
non change
• The government will collect [Select]
from Luciana through the soda tax.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F77492f57-67bf-48ef-9e56-88462c236cf7%2F7246a2d7-a625-4768-9274-10afcfc7d331%2Fbwyauh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:At a price of $1 each, Luciana (an average Bloomington resident) consumes 100 32-ounce sodas per
year. Concerned that so much soda consumption may contribute to poor health, the Bloomington
Mayor proposes a $0.20 tax on sodas. To avoid losing voters, the Mayor simultaneously proposes
mailing a check for $20 to each Bloomington resident.
As a result of these two policies, we predict (using the standard consumer choice model) that
• Luciana's soda consumption will [Select]
• Luciana will be [Select]
• The government will collect [Select]
✓from Luciana through the soda tax.
At a price of $1 each, Luciana (an average Bloomington resident) consumes 100 32-ounce sodas per
year. Concerned that so much soda consumption may contribute to poor health, the Bloomington
Mayor proposes a $0.20 tax on sodas. To avoid losing voters, the Mayor simultaneously proposes
mailing a check for $20 to each Bloomington resident.
As a result of these two policies, we predict (using the standard consumer choice model) that
• Luciana's soda consumption wil✓ [Select]
decrease
• Luciana will be [Select]
increase
non change
• The government will collect [Select]
from Luciana through the soda tax.
![At a price of $1 each, Luciana (an average Bloomington resident) consumes 100 32-ounce sodas per
year. Concerned that so much soda consumption may contribute to poor health, the Bloomington
Mayor proposes a $0.20 tax on sodas. To avoid losing voters, the Mayor simultaneously proposes
mailing a check for $20 to each Bloomington resident.
As a result of these two policies, we predict (using the standard consumer choice model) that
• Luciana's soda consumption will [Select]
• Luciana will be ✓ [Select]
better off
• The governme
worse off
from Luciana through the soda tax.
just as well off as before
At a price of $1 each, Luciana (an average Bloomington resident) consumes 100 32-ounce sodas per
year. Concerned that so much soda consumption may contribute to poor health, the Bloomington
Mayor proposes a $0.20 tax on sodas. To avoid losing voters, the Mayor simultaneously proposes
mailing a check for $20 to each Bloomington resident.
As a result of these two policies, we predict (using the standard consumer choice model) that
• Luciana's soda consumption will [Select]
• Luciana will be [Select]
• The government will collec✓ [Select]
from Luciana through the soda tax.
less than $20
more than $20
exactly $20](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F77492f57-67bf-48ef-9e56-88462c236cf7%2F7246a2d7-a625-4768-9274-10afcfc7d331%2Fyqge8ry_processed.jpeg&w=3840&q=75)
Transcribed Image Text:At a price of $1 each, Luciana (an average Bloomington resident) consumes 100 32-ounce sodas per
year. Concerned that so much soda consumption may contribute to poor health, the Bloomington
Mayor proposes a $0.20 tax on sodas. To avoid losing voters, the Mayor simultaneously proposes
mailing a check for $20 to each Bloomington resident.
As a result of these two policies, we predict (using the standard consumer choice model) that
• Luciana's soda consumption will [Select]
• Luciana will be ✓ [Select]
better off
• The governme
worse off
from Luciana through the soda tax.
just as well off as before
At a price of $1 each, Luciana (an average Bloomington resident) consumes 100 32-ounce sodas per
year. Concerned that so much soda consumption may contribute to poor health, the Bloomington
Mayor proposes a $0.20 tax on sodas. To avoid losing voters, the Mayor simultaneously proposes
mailing a check for $20 to each Bloomington resident.
As a result of these two policies, we predict (using the standard consumer choice model) that
• Luciana's soda consumption will [Select]
• Luciana will be [Select]
• The government will collec✓ [Select]
from Luciana through the soda tax.
less than $20
more than $20
exactly $20
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