Suppose that, by law, a person is required to consume a fixed amount of good X, say X0.  Assuming X is a normal good, explain how this law reduces utility for both high and low income people.

Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics
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Suppose that, by law, a person is required to consume a fixed amount of good X, say X0.  Assuming X is a normal good, explain how this law reduces utility for both high and low income people.  

 

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