(Lump Sum vs. Excise Tax) Use indifference curves to illustrate the superiority of a lump sum tax over an excise tax that generates the same revenue from an individual taxpayer.

(a) Present a diagram that illustrates the superiority of a lump sum tax over an excise tax that generates the same revenue, and discuss the implications of your diagram.

(b) On a separate diagram, show the effects of a general sales tax that raises the prices of all goods by 20%

(c) On a separate diagram, show the effects of a general incom (or wealth) tax that reduces income (or wealth) of a taxpayer by 20%.

(d) Are either of these taxes (in 3.b and 3.c) neutral? Why or why not?