7) By how much is the price paid by consumer increasing after the $3 tax is imposed?
a)
1
b)
2
c)
3
d)
6
8)
How much money will the government collect in taxes?
Use the following information to answer questions 9 and 10.
The utility function is given by
U(x,y)=4(xy)
0.5
+10.
The price of good x is $2, the price of good y is $6 and the consumer has
$48 to spend. Assume good y is on the vertical axis.
9)
What is the Marginal rate of substitution of y for x when x=2 and y=4?
10)
What is the slope of the budge line?

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