The 1-year interest rates for the next five years are expected to be 4%, 3%, 6%, 5%, and 7%, respectively. The 3-year term premium is 1%. The 4-year…
October 11, 2020
hey there I am doing a hypothesis testing research and was wondering if im doing this correctly.
October 11, 2020
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Question 4. (10 points) A consumer has the utility function U(X,Y) = X0.6 Y 0. Her income is $9600 and she faces prices Px=8 and Py=12.

Question 4. (10 points) A consumer has the utility function U(X,Y) = X0.6 Y 0.24. Her income is $9600 and she faces prices Px=8 and Py=12. Would this consumer prefer to be taxed on good Y at 25% or a revenue equivalent income tax. Illustrate your answer.

 

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