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Assume a budget line is p1x1 + p2x2 = I. Suppose the government imposes an income tax of T and place a quantity tax of
Assume a budget line is p1x1 + p2x2 = I. Suppose the government imposes an income tax of T and place a quantity tax of on commodity x1 and an ad valorem subsidy of s on x2. Show how the taxes and the subsidy together afect the budget line
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