3. Imagine the following polin to open up international travel for Australians to take international holidays overseas despite the pandemic. The Australian government would build
3. Imagine the following polin to open up international travel for Australians to take international holidays overseas despite the pandemic. The Australian government would build new quarantine facilities at a xed cost of $Z and everyone taking an international holiday would have to spend 2 weeks in quarantine on return, but there would he no other restrictions on Australians taking international holidays. It would be a free market again. Assume for simplicity there is just one Australian consumer and the only two goods available are food and international holidays {prices and income are strictly positive). The price of an international holiday includes the 2 weeks in quarantine. (a) Illustrate using a 2 good indifference curve diagram(s]| funding the quarantine through taxing international holidays or taxing income. Be sure to show how both methods exactly meet the east of the quarantine facility $3. Hint: put food on the vertical axis and international holidays on the horizontal axis. Briey explain. [9 marks] {b} Is one form of tax better than the other? Explain your answer. [6 marks]
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