Suppose the initial budget constraint is: p₁x₁ + P2X2 = m. Then, a new government imposes an ad valorem sales tax on all goods, at a rate of 5%. What is the new budget constraint? O 1.5 p1x1 + 1.5 p2x2 = m O 105 p1x1 + 105 p2x2 = m O P1X1 + P2x2 = 1.05 m O 1.05 p1x1 +1.05 p2x2 = m O P1X1 + P2X2 = m

Suppose the initial budget constraint is: p₁x₁ + P2X2 = m. Then, a new government imposes an ad valorem sales tax on all goods, at a rate of 5%. What is the new budget constraint? O 1.5 p1x1 + 1.5 p2x2 = m O 105 p1x1 + 105 p2x2 = m O P1X1 + P2x2 = 1.05 m O 1.05 p1x1 +1.05 p2x2 = m O P1X1 + P2X2 = m

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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