question archive Consider a consumer with Leontief type preferences (the two goods are perfect complements) which are summarized in the picture below: 42 42 = 42 LP The consumer's income is 100 TL, the price of good 1 is 5 TL/unit, and the price of good 2 is 10 TL/unit
Consider a consumer with Leontief type preferences (the two goods are perfect complements) which are summarized in the picture below: 42 42 = 42 LP The consumer's income is 100 TL, the price of good 1 is 5 TL/unit, and the price of good 2 is 10 TL/unit
Subject:EconomicsPrice: Bought3
Consider a consumer with Leontief type preferences (the two goods are perfect complements) which are summarized in the picture below: 42 42 = 42 LP The consumer's income is 100 TL, the price of good 1 is 5 TL/unit, and the price of good 2 is 10 TL/unit. a. If there is a 10TL/unit sales tax on good 1 how much good 1 and good 2 will the consumer consume and how much tax will the government collect? 2/3 b. If the government instead collects a lump sum income tax to the tax that the government would collect under the sales tax policy of part (a), how much good 1 and good 2 would the consumer consume? .al c. Which of the two above tax policies would the consumer prefer? d. If the government imposed an income tax of 10%, what would the optimal bundle be?
