Representative household spends the fixed monetary income M on two goods X and Y. Good X is taxed at rate t per unit and good Y is subsidized at rate s per unit. The tax and subsidy rates are such that the government budget is balanced. Comment on the following analysis proposed by some student: 'as household's disposable income stays the same after the introduction of government regulation this policy will have no impact on household's welfare'. You are expected to provide an explanation and graphical solution.