Consider the following budget constraint 1=PB²B+ PT¹T and Utility Function U(x, y) (6T5+ 48 51.5 Where B is Beer, Tis Tacos, Pg is the price of beer, Pr is the price of Tacos, and I is income Assume income is 20, the price of beer is 2, the price of tacos is 4, and a 1 dollar tax on each beer consumed. Do not round your answer more tacos due to the substitution effect (HINT CONSIDER THE SUBSTITUTION The one-dollar tax on beer, would cause you to buy EFFECT ONLY)
Consider the following budget constraint 1=PB²B+ PT¹T and Utility Function U(x, y) (6T5+ 48 51.5 Where B is Beer, Tis Tacos, Pg is the price of beer, Pr is the price of Tacos, and I is income Assume income is 20, the price of beer is 2, the price of tacos is 4, and a 1 dollar tax on each beer consumed. Do not round your answer more tacos due to the substitution effect (HINT CONSIDER THE SUBSTITUTION The one-dollar tax on beer, would cause you to buy EFFECT ONLY)
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section: Chapter Questions
Problem 8SQP
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Transcribed Image Text:Consider the following budget constraint
I=PB²B+ PT*T
and Utility Function
U(x, y) (6T 5+ 4B-5,1/5
#
Where B is Beer, Tis Tacos, Pg is the price of beer, PT is the price of Tacos, and I is income Assume income is 20, the price of beer is 2, the
price of tacos is 4, and a 1 dollar tax on each beer consumed. Do not round your answer.
more tacos due to the substitution effect (HINT. CONSIDER THE SUBSTITUTION
The one-dollar tax on beer, would cause you to buy
EFFECT ONLY)
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