Suppose the government levies a per-unit tax on TVs, and this tax increases the price of TVs by $10.
a.On a graph with TVs on the horizontal axis and "$'s of other consumption" on the vertical, illustrate how the budget constraint for a consumer with exogenous income changes as a result of the tax.
b.Suppose you know the bundle on the after-tax budget that is chosen by the consumer.Illustrate on your graph how much in tax revenue the government is raising from this consumer.
c.If the government replaced the tax on TVs with a lump sum tax that does not alter any prices but raises the same amount of revenue from the consumer, how would this consumer's budget constraint change?

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The Answer of Suppose the government levies a per-unit tax on TVs, and this tax increases the price of TVs by $10.
a.On a graph with TVs on the horizontal axis and "$'s of other consumption" on the vertical, illustrate how the budget constraint for a consumer with exogenous income changes as a result of the tax.
b.Suppose you know the bundle on the after-tax budget that is chosen by the consumer.Illustrate on your graph how much in tax revenue the government is raising from this consumer.
c.If the government replaced the tax on TVs with a lump sum tax that does not alter any prices but raises the same amount of revenue from the consumer, how would this consumer's budget constraint change?

Suppose the Government Levies a Per-Unit Tax on TVs, and This