M = $160 budgeted to be spend on these two goods and the prices of Apples and Ice Cream are p1 =$2, p2 =$1. Yam's optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) Suppose a quantity tax of $1 is imposed on lc Cream. Yam's after tax optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical vali with no comma or decimal place.) Suppose instead of the quantity tax, the government choose to impose a lump-sum tax of $20. After the imposition of the lump-sum tax, Yam's optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) If government would have to impose one of these 2 kinds of taxes, which of these types of tax would be better option for Yam (pleas Q for quantity tax and L for lump-sum tax, upper case only). Which of these types of tax would generate more money for the government - (please

Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section6.A: Indifference Curve Analysis
Problem 3SQP
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Yam has the following utility function for Apples (X1) and Ice Cream (X2), U(X1,X2) = Min{3X1,X2}. Yam likes to get more of both Apples and Ice Cream. Suppose Yam has an income of
M = $160 budgeted to be spend on these two goods and the prices of Apples and Ice Cream are p1 =$2, p2 =$1. Yam's optimal consumption of Apples is
and Ice Cream is
(Please put your answer in numerical values with no comma or decimal place.) Suppose a quantity tax of $1 is imposed on Ice
Cream. Yam's after tax optimal consumption of Apples is
and Ice Cream is
(Please put your answer in numerical values
with no comma or decimal place.) Suppose instead of the quantity tax, the government choose to impose a lump-sum tax of $20. After the imposition of the lump-sum tax, Yam's
optimal consumption of Apples is
and Ice Cream is
(Please put your answer in numerical values with no comma or
decimal place.) If government would have to impose one of these 2 kinds of taxes, which of these types of tax would be better option for Yam
(please put
Q for quantity tax and L for lump-sum tax, upper case only). Which of these types of tax would generate more money for the government
- (please put
Q for quantity tax and L for lump-sum tax, upper case only).
Transcribed Image Text:Yam has the following utility function for Apples (X1) and Ice Cream (X2), U(X1,X2) = Min{3X1,X2}. Yam likes to get more of both Apples and Ice Cream. Suppose Yam has an income of M = $160 budgeted to be spend on these two goods and the prices of Apples and Ice Cream are p1 =$2, p2 =$1. Yam's optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) Suppose a quantity tax of $1 is imposed on Ice Cream. Yam's after tax optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) Suppose instead of the quantity tax, the government choose to impose a lump-sum tax of $20. After the imposition of the lump-sum tax, Yam's optimal consumption of Apples is and Ice Cream is (Please put your answer in numerical values with no comma or decimal place.) If government would have to impose one of these 2 kinds of taxes, which of these types of tax would be better option for Yam (please put Q for quantity tax and L for lump-sum tax, upper case only). Which of these types of tax would generate more money for the government - (please put Q for quantity tax and L for lump-sum tax, upper case only).
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