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economics question 7} Barry eats a lot of sugary cereal with milk. He spends $31} each week on milk [11} and sugary cereal [11}, and
economics question
7} Barry eats a lot of sugary cereal with milk. He spends $31} each week on milk [11} and sugary cereal [11}, and the price of each is l [p] = l and p1 = 1]. Barry always consumes one ounce of milk for every two ounces of cereal. The government is trying to decrease the consumption of sugary cereals and is debating between two options: 1]: Limiting the quantity of sugary cereal that can he bought to 145 ounces {ration} 1]: Implementing a quantity tax on sugary cereal of 51, which would increase p; to 52. Which policy would Barry prefer? In other words, under which policy will Barry have a higher utility? Explain using a graph and providing a hrief explanation {12 points} Step by Step Solution
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