se graph to explain Suppose prices are PA = 2, PB = 1 and income is n = 100. (a) Show with the graph change in the budget set if the price of x decreased and price of y increased such that P 0 A = 1 and P 0 B = 2. (b) Suppose that the nation taxes (at the new set of prices P 0 A = 1 and P 0 B = 2) the consumer an extra 0.50 dollar for each unit of x he buys beyond 70 units. That is, no tax is collected for units x < 70, and 0. 50$ tax for each x ≥ 70. Show the new budget set in the graph.
se graph to explain Suppose prices are PA = 2, PB = 1 and income is n = 100. (a) Show with the graph change in the budget set if the price of x decreased and price of y increased such that P 0 A = 1 and P 0 B = 2. (b) Suppose that the nation taxes (at the new set of prices P 0 A = 1 and P 0 B = 2) the consumer an extra 0.50 dollar for each unit of x he buys beyond 70 units. That is, no tax is collected for units x < 70, and 0. 50$ tax for each x ≥ 70. Show the new budget set in the graph.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Use graph to explain Suppose prices are PA = 2, PB = 1 and income is n = 100. (a) Show with the graph change in the budget set if the
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