Given the following budget line ???+???=? And that the slope of the budget line depends only on relative prices, show what happens to the budget line when: (a) ?? rises (b) ? reduces (c) Both ?? and ?? rise by the same proportion (d) a consumer is given an in-kind transfer of 40 units of good ? (e) the government imposes a quantity tax (t) on good ?

Given the following budget line ???+???=? And that the slope of the budget line depends only on relative prices, show what happens to the budget line when: (a) ?? rises (b) ? reduces (c) Both ?? and ?? rise by the same proportion (d) a consumer is given an in-kind transfer of 40 units of good ? (e) the government imposes a quantity tax (t) on good ?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter7: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 6QP

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Question

Question 4

Given the following budget line ???+???=?

And that the slope of the budget line depends only on relative prices, show what happens to the budget line when:

(a) ?? rises
(b) ? reduces
(c) Both ?? and ?? rise by the same proportion
(d) a consumer is given an in-kind transfer of 40 units of good ?
(e) the government imposes a quantity tax (t) on good ?

Given the following budget line PxX + Pyy = m
And that the slope of the budget line depends only on relative prices, show what
happens to the budget line when:
(a) Px rises
(b) m reduces
(c) Both px and p, rise by the same proportion
(d) a consumer is given an in-kind transfer of 40 units of good y
(e) the government imposes a quantity tax (t) on good y

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