What if there is a situation with two goods and an income of b>0. How does the lump sum ta T which is levied on every person independent of his or her income or market behavior affect the budget constraint? a. the budget constraint rotates upwards at point (0, b/P2) b. the budget constraint rotates inwards at point (0, b/P2) c. the budget constraint shifts outwards in a parallel way d. the budget constraint shifts inwards in a parallel way

What if there is a situation with two goods and an income of b>0. How does the lump sum ta T which is levied on every person independent of his or her income or market behavior affect the budget constraint? a. the budget constraint rotates upwards at point (0, b/P2) b. the budget constraint rotates inwards at point (0, b/P2) c. the budget constraint shifts outwards in a parallel way d. the budget constraint shifts inwards in a parallel way

Principles of Economics (MindTap Course List)

8th Edition

ISBN:9781305585126

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 1QR

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