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1.A consumer purchases housing and spends the remainder of income on the composite good. The government is considering one of two policies. Policy A taxes
1.A consumer purchases housing and spends the remainder of income on the composite good. The government is considering one of two policies. Policy A taxes housing by $50 per unit consumed. With the tax in place, the consumer purchases 100 units of housing. Policy B collects a lump-sum tax of $5,000 from the consumer's income. Compare the effects of the policies on the consumer's utility/well-being and the amount of housing and composite goods purchased.
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