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Please provide explanation Use budget constraints and indifference curves to answer the following: Suppose that the average household consumes 500...
Please provide explanation
Use budget constraints and indifference curves to answer the following:
Suppose that the average household consumes 500 gallons of gasoline per year. A 10-cent per gallon tax is introduced coupled with a $50 annual tax rebate per household.
How will the consumption of gasoline be affected? Will the household be better or worse off after the new program is introduced?