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*3.3 Governments frequentlyr limit how much of a good a consumer can buy. During emergencies, governments may ration essential goods such as water. food. and

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*3.3 Governments frequentlyr limit how much of a good a consumer can buy. During emergencies, governments may ration "essential\" goods such as water. food. and gasoline rather than let their prices rise. Suppose that the government rations water. setting quotas on how much a consumer can purchase. If a consumer can afford to buy 12,000 gallons a month but the government restricts purchases to no more than 10,000 gallons a month. how do the consumer's budget line and opportunity set change? 3.4 What happens to the budget line ifthe government applies a specic tax of $1 per gallon on gasoline but does not tax other goods? 1What happens to the budget line if the tax applies onlyr to purchases of gasoline in excess of 10 gallons per week? 4.4 Mark consumes only cookies and books. At his current consumption bundle, his marginal utility from books is 10 and from cookies is 5. Each book costs $10, and each cookie costs $2. Is he maximizing his utility? Explain. If he is not, how can he increase his utility while keeping his total expenditure constant? M

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