8. Felix's preferences can be represented by the following utility function: u(x1, x2) = (xx2) , where xy and xy denote the amounts consumed of goods 1 and 2, respectively. The prices of these goods are py > 0 and pz >0, respectively, and his wealth is w > 0. The government needs to collect a large amount of money to finance a new Health Care plan, and contemplates two options: (i) Introduce an income tax equivalent to 40% of Felix's wealth; or (ii) Charge a sales tax over the price of good 1 which would imply an increase in the price of good 1 from p: top1(1 +1), collecting the same dollar amount as with the income tax. Use Felix's indirect utility function to evaluate option 1 (income tax) and option 2 (sales tax). Explain which tax produces a smaller utility reduction