1. For what kind of preferences will the consumer be just as well off facing a quantity tax as an income tax? 2. Someone is willing to maximize his/her utility. Assume he/she knows his/her u(x,y) %3D x0.Sy0.s (Cobb-Douglas) (a) Find his/her optimal consumption given the income = 20, Px=2, Py=4! %3D (b) Depict his/her optimal consumption graph! 3. Suppose that x and y (from your answer in number 2) are now perfect complement with u(x,y) = min(x,y). (a) Find his/her optimal consumption (given the same income and prices)! (b) Depict his/her optimal consumption graph!

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Q: utility

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Q: in what will happen to the

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