What influences kaminis optimal bundle of tacos and burritos

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Reference no: EM13222761

Kamini consumes tacos and burritos. Suppose her marginal utility for tacos and her marginal utility for burritos are constant @ 4. Also, the price of a taco = $1.00, price of burrito = $2.00 Kamini's income (budget) = $20.00

A) using a graph, draw kamini's utility-maximizing bundle of tacos and burritos being careful to illustrate kamini's budget line and indifference curve
B) Now, supposed the government levies a $2 excise tax on tacos, which effectively increase the price of a taco form $1 to $3. Using a graph, draw how this influences Kamini's optimal bundle of tacos and burritos.

Reference no: EM13222761

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