Prices are still px 4 and Py = 3, and there is no sale tax on T-Rex toys. Income is equal to the amount you computed in the previous question. But now the government decides to tax yak toys, imposing a sale tax of 100% on py. The government wants to maintain the target utility of U 60. How much money does the government need to give Gina for her to achieve U = 60? O 20 15 0 30 =
Prices are still px 4 and Py = 3, and there is no sale tax on T-Rex toys. Income is equal to the amount you computed in the previous question. But now the government decides to tax yak toys, imposing a sale tax of 100% on py. The government wants to maintain the target utility of U 60. How much money does the government need to give Gina for her to achieve U = 60? O 20 15 0 30 =
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
![Prices are still
Px
4 and Py
3, and there is no sale tax on T-Rex toys. Income is equal to the
amount you computed in the previous question. But now the government decides to tax yak toys,
imposing a sale tax of 100% on py. The government wants to maintain the target utility of U = 60.
How much money does the government need to give Gina for her to achieve U = 60?
O
O
20
15
0
30
=
=](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8b686a53-4fe9-4179-9a2d-0237054b121e%2F992c35fc-f9e2-4fcf-a168-d7713e595160%2Fsxmvuwr_processed.png&w=3840&q=75)
Transcribed Image Text:Prices are still
Px
4 and Py
3, and there is no sale tax on T-Rex toys. Income is equal to the
amount you computed in the previous question. But now the government decides to tax yak toys,
imposing a sale tax of 100% on py. The government wants to maintain the target utility of U = 60.
How much money does the government need to give Gina for her to achieve U = 60?
O
O
20
15
0
30
=
=
![Gina is at a toy store and is buying toy T-Rex's (x), which cost px, and toy yaks (y),
which cost py. Her income is I. She likes 3 T-Rex's as much as she likes 4 yaks. These
toys are perfect substitutes for her.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8b686a53-4fe9-4179-9a2d-0237054b121e%2F992c35fc-f9e2-4fcf-a168-d7713e595160%2Fh4y3pbl_processed.png&w=3840&q=75)
Transcribed Image Text:Gina is at a toy store and is buying toy T-Rex's (x), which cost px, and toy yaks (y),
which cost py. Her income is I. She likes 3 T-Rex's as much as she likes 4 yaks. These
toys are perfect substitutes for her.
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