Consider a consumer that only purchases two goods,X and Y.The government wishes to collect revenue from taxing this consumer and is considering two policies.The first policy is to only tax good X.The second policy will tax both goods by the same percentage.Assume that the tax rates in each policy are selected such that they collect the same amount of revenue.Which policy will have a smaller reduction in the consumer's well-being? (Use a graph of indifference curves and budget constraints to illustrate your answer)

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The Answer of Consider a consumer that only purchases two goods,X and Y.The government wishes to collect revenue from taxing this consumer and is considering two policies.The first policy is to only tax good X.The second policy will tax both goods by the same percentage.Assume that the tax rates in each policy are selected such that they collect the same amount of revenue.Which policy will have a smaller reduction in the consumer's well-being? (Use a graph of indifference curves and budget constraints to illustrate your answer)

Consider a Consumer That Only Purchases Two Goods,X and Y