Question
Cameron works for the Department of Tax Revenue.All the citizens who pay taxes to Cameron's Department have the same utility function, U(x,y) = x+y and
Cameron works for the Department of Tax Revenue.All the citizens who pay taxes to Cameron's Department have the same utility function, U(x,y) = x+yand the same budget of $10.00.Good xhas a per unit price of $0.95, whereas Good yhas a per unit price of $1.00.Cameron has estimated that imposing a tax of $0.10 per unit on Good xwas raise $1.05 per citizen.Cameron is mistaken.Calculate the difference in the actual amount of revenue per citizen that the tax will raise for the Department of Tax Revenue versus Cameron's estimate.Note that the amount of revenue per citizen can be calculated as 0.10x*.Your answer should be in cents ($0.XX for example).
Please explain your work and the steps you took!
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