1 Francesca buys pencils and erasers at 10$ and 9$ per amount. Francesca has an income of 90$. There is a 20% ad valorem tax. a)If Francesca’s utility is U(P, E) = P^(1/3)E^(2) find the ordinary demand without tax imposition. b) If Francesca’s utility is U(P, E) = P^(1/3)E^(2), Please find the ordinary demand with 20% ad valorem tax .
1 Francesca buys pencils and erasers at 10$ and 9$ per amount. Francesca has an income of 90$. There is a 20% ad valorem tax. a)If Francesca’s utility is U(P, E) = P^(1/3)E^(2) find the ordinary demand without tax imposition. b) If Francesca’s utility is U(P, E) = P^(1/3)E^(2), Please find the ordinary demand with 20% ad valorem tax .
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1 Francesca buys pencils and erasers at 10$ and 9$ per amount. Francesca has an income of 90$. There is a 20% ad valorem tax.
a)If Francesca’s utility is U(P, E) = P^(1/3)E^(2) find the ordinary demand without tax imposition.
b) If Francesca’s utility is U(P, E) = P^(1/3)E^(2), Please find the ordinary demand with 20% ad valorem tax
.
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