|
|
| But... But... You're not logged in! |
 |
There's so much more you can do when you're a member of StudentofFortune.com! ♥♥♥Join now♥♥♥ (or log in) to:
- Ace all of your classes forever: Get answers to your homework or exam questions
- Make piles of bling: Get paid for helping other students
- Giggle like a little girl with even more cute kitty photos
- Create world peace by aligning the planets during the Age of Aquarius... and much more!
|
$7.00 Budget Line, Indifference Curves, and TaxesThis question's due date has already passed. You may post a solution, but there's no guarantee that the original asker will buy the solution. But other people might!
| Question Details |
Bounty: $7.00 Negotiable
Due Date: May-12-2008
Posted On: May-11-2008, 11:23:53AM
Categories: Economics: Public Finance
|
|
|
| Asked By |
|
|
| Question |
B) The per unit price of apples and oranges is initially $0.25. Sketch the budget line for Michael, who plans to spend $6 on some combination of apples and oranges. Add an indifference curve assuming his optimal combination is 14 oranges and 10 apples. Suppose a $0.35 per unit tax is imposed on the sale of apples and assume the supply of apples is perfectly elastic (so the price per apple increases to $0.60).
a) Show the effect on the budget line and add a new indifference curve assuming his optimal combination is now 12 oranges and 5 apples.
b) If a line can be drawn parallel to the first budget line, tangent to the second indifference curve, and intersecting both axes at 16, how much is the equivalent variation?
c) How much is the excess burden of this tax?
| |
| Privacy Policy | Terms of Use | Press | Frequently Asked Questions | Contact Us | Affiliates