Question 1: Taxes and ination [10 points] Starting from the budget constraint 1931' + Pyy = m, consider the following changes in prices and income. 1. In class, you learned how the budget constraint changes when there is a unit tax on good :12. With a unit tax (or quantity tax), the consumer has to pay a certain amount 1' for each unit of good a\" that he purchases (pI > pI + 1'). Now we consider a value tax (or ad valorem tax), where the consumer has to pay a certain percentage 7' of the value of good at, on top of the price of good a\" (p1 > (1 + T)pz) (e.g., think of the Ontario sales tax of 13%). Show graphically how the budget constraint changes when the govermnent imposes a value tax on good at (label everything!). [5 points] 2. Suppose there is ination, and both prices pr, py, and income in double (m > 2m, pI > 2pm, py > 2,133,). Show graphically how the budget constraint changes with ination (label everythingi). Write down the new budget constraint algebraically how does it compare to the 01d budget constraint?I [5 points]