The government wishes for Alonso to buy fewer sport cars because they create too much pollution. The government decides to place a tax on the price of sport cars. How large does 7 need to be so that Alonso buys half of his original number of sport cars? What is Alonso's new utility under the tax? T= 2, V = 450 T= 2, V = 400 T = 1.5, V = 350 T = 1, V = 500

The government wishes for Alonso to buy fewer sport cars because they create too much pollution. The government decides to place a tax on the price of sport cars. How large does 7 need to be so that Alonso buys half of his original number of sport cars? What is Alonso's new utility under the tax? T= 2, V = 450 T= 2, V = 400 T = 1.5, V = 350 T = 1, V = 500

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics

Section20.1: Utility Theory

Problem 2ST

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