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16. Suppose that the government taxes water but gives consumers a rebate which allows them to purchase just as much water as they had been
16. Suppose that the government taxes water but gives consumers a rebate which allows them to purchase just as much water as they had been before the tax. Which of the following would occur? a. A consumer's new budget constraint will fit inside the original budget constraint. b. A consumer will purchase more water than before this policy was enacted. c. A consumer will purchase less water than before this policy was enacted. d. Both (a) and (b) e. Both (a) and (c)
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