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In class we learned to evaluate whether a consumer with well-behaved preferences is better off from a lump sum tax or a quantity tax (conditional

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In class we learned to evaluate whether a consumer with well-behaved preferences is better off from a lump sum tax or a quantity tax (conditional on the same amount of government revenue raised). In this problem, we will explore the meaning of well-behaved preferences and its relation to tax policy. Assume Daryl has the following utility function U = -(x, -10)2 - (x2 -10)2 Graph a representative indifference curve, show several arrows over which preferences are increasing. [5 points]

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