Suppose Px = 2, Py = 1, I = 100
a)Show the budget set.
b)Suppose now the x decreased and price of y increased such that P'x = 1, P'y = 2. Show the budget set.
c)Suppose that the government taxes (at the new set of prices P'x = 1, P'y = 2 ) the consumer an extra 1/2 dollar for each unit of x he buys beyond 70 units. That is no tax for x<70 and 1/2 dollar tax for each x>=70. Show the new budget set.