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Suppose that the consumer's utility function is given by u(c 1 , c 2 ) = c 1 .50 c 2 .50 . Using a
Suppose that the consumer's utility function is given by u(c1 ,c2) = c1.50 c2.50 . Using a Lagrangian, solve algebraically for the consumer's optimal choice of c1 and c2 as functions of P1, P2, t2, and Y . Graphically show how, for this particular utility function, the optimal choice changes due to the imposition of the sales tax on good 2.
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