Zara is a utility maximizer interested in two goods, X and Y. Her utility function is given by U=min(2x,4y). Suppose Zara's income is fixed and equal to 712, the price of good X is 4 and the price of good Y is 7. Calculate Zara's excess burden if the government imposes 12% sales tax on good X and 14% sales tax on good Y, assuming the prices sellers charge do not change after the imposition of the sales taxes. (Show your derivations or justify your answer if you submit your handwritten work.) Then enter the value of Zara's excess burden below. Answer:
Zara is a utility maximizer interested in two goods, X and Y. Her utility function is given by U=min(2x,4y). Suppose Zara's income is fixed and equal to 712, the price of good X is 4 and the price of good Y is 7. Calculate Zara's excess burden if the government imposes 12% sales tax on good X and 14% sales tax on good Y, assuming the prices sellers charge do not change after the imposition of the sales taxes. (Show your derivations or justify your answer if you submit your handwritten work.) Then enter the value of Zara's excess burden below. Answer:
Chapter1: Making Economics Decisions
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![Zara is a utility maximizer interested in two goods, X and Y. Her utility function is given by U=min(2x,4y). Suppose Zara's income is fixed and equal to 712, the price of good X is 4 and the price of
good Y is 7.
Calculate Zara's excess burden if the government imposes 12% sales tax on good X and 14% sales tax on good Y, assuming the prices sellers charge do not change after the imposition of the
sales taxes. (Show your derivations or justify your answer if you submit your handwritten work.)
Then enter the value of Zara's excess burden below.
Answer:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F42899459-396d-4157-9621-538988e3c4d3%2F4d61f397-5477-4cf9-b6d4-11834cd378f0%2F7skaide_processed.png&w=3840&q=75)
Transcribed Image Text:Zara is a utility maximizer interested in two goods, X and Y. Her utility function is given by U=min(2x,4y). Suppose Zara's income is fixed and equal to 712, the price of good X is 4 and the price of
good Y is 7.
Calculate Zara's excess burden if the government imposes 12% sales tax on good X and 14% sales tax on good Y, assuming the prices sellers charge do not change after the imposition of the
sales taxes. (Show your derivations or justify your answer if you submit your handwritten work.)
Then enter the value of Zara's excess burden below.
Answer:
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