QUESTION 1

1. assume a consumer's utility function is X1*X2, income =100, the sticker price of good 1 is $2, the per-unit tax on good 1 is $3, and the tax inclusive price of good 2 is $1.
3. What is this consumer's optimal (maximum) utility?

QUESTION 2

1. assume a consumer's utility function is X1*X2, income =100, the sticker price of good 1 is $2, the per-unit tax on good 1 is $3, and the tax inclusive price of good 2 is $1.
3. What is the government's revenue from this consumer?

2 points (Extra Credit)

QUESTION 3

2. Suppose the imposed an equivalent head tax.That is, assume instead of the per unit tax the government imposes a head tax that generates the same revenue as you found in the previous question.What is the consumer's utility under this equivalent head tax?