4.7 Since 2013, China has charged import duties on goods purchased from foreign Web sites. The duties varied depending on the products. For example, a 50%

duty was levied on cosmetics, but a duty of only 10%

was levied on food. Since 2016, Chinese consumers have been allowed to import up to ¥2,000 worth of goods from e-commerce sites outside China by paying a flat tax of 11.9% (https://azertag.az/en/xeber/

China_imposes_new_taxes_on_goods_purchased_ through_foreign_websites-945632). Use an indifference curve/budget-line diagram to show the impact of the new policy on the sales of Chinese companies producing food products and cosmetics. (Hint: Start by drawing a typical Chinese consumer’s indifference curve between buying each of the products from a Chinese company or from a foreign Web site.)