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35) Suppose Lucy has what we term Leontief preferences over coffee and sugar; that is, she views them as perfect complements, and only values getting

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35) Suppose Lucy has what we term "Leontief preferences" over coffee and sugar; that is, she views them as perfect complements, and only values getting an extra unit (cup) of coffee if it is accompanied by two extra units (tsps.) of sugar. Given her preferences, and assuming that these are the only two goods consumed, and that govt. tax revenue is the same under each type of tax: a. Lucy will be better off facing a lump-sum income tax due to the substitution effect b. Lucy will be better off facing a sales tax per unit on sugar due to the income effect c. Lucy will be indifferent between a sales tax and a lump-sum income tax d. Lucy will be better off facing a lump-sum income tax due to the income effect e. Lucy will be better off facing a sales tax per unit on sugar due to the substitution effect

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