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 Py 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
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 Py 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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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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 py 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
please take note of the image
![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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fad2a44b4-f15b-4dc8-879d-1f5ab8ee171c%2F79507bb4-7d0b-4f42-9b30-30a48c6c7e34%2Fmtt7ls_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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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