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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

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

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
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: 

  1. (a) px rises 
  2. (b) m reduces 
  3. (c) Both px and py rise by the same proportion 
  4. (d) a consumer is given an in-kind transfer of 40 units of good y 
  5. (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
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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