SEE PIC ATTACHED: A consumer has preferences for tacos and soda represented by the utility function u = √ ts. Current prices are pt = $4 and ps = $1, and he has y = $8 to spend on lunch. Suppose that

SEE PIC ATTACHED: A consumer has preferences for tacos and soda represented by the utility function u = √ ts. Current prices are pt = $4 and ps = $1, and he has y = $8 to spend on lunch. Suppose that a policy is implemented to reduce soda consumption by increasing the price to $4. (a) Calculate the welfare cost of the price increase by using the measures of CV, EV, and the change in consumer surplus.