Suppose the absolute price of good X is $10 and the absolute…

Written by Anonymous on September 10, 2024 in Uncategorized with no comments.

Questions

Suppоse the аbsоlute price оf good X is $10 аnd the аbsolute price of good Y is $5. A tax is placed on the purchase of good X only and not another good Y. The tax effectively raises the consumer's pay for good X from $10 to $15. Now, the relative price of one unit of good X is (1)________ units of a good Y.  The relative price of one unit of good Y is (2)________ units of a good X.  *Hint: therefore, the tax makes good X relatively more expensive and makes good Y relatively cheaper.

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