Yam has the following utility function for Apples (X1) and Ice Cream (X2). U(X1,X2) = Min{3X1,X2}. If the prices of Apples and Ice Cream are P1 $1, p2 -$1. Suppose a quantity tax of $1 is imposed on Apples. Which of the following is true after the imposition of the tax? O a. Yam's demand for Ice Cream will not decrease O b. Only Yam's demand for Apple will decreased O c. Yam's demand for both Ice Cream and Apple will decrease O d. The tax will not change Yam's utility

Yam has the following utility function for Apples (X1) and Ice Cream (X2). U(X1,X2) = Min{3X1,X2}. If the prices of Apples and Ice Cream are P1 $1, p2 -$1. Suppose a quantity tax of $1 is imposed on Apples. Which of the following is true after the imposition of the tax? O a. Yam's demand for Ice Cream will not decrease O b. Only Yam's demand for Apple will decreased O c. Yam's demand for both Ice Cream and Apple will decrease O d. The tax will not change Yam's utility

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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