The government of France taxes movies that are produced outside of the country at the rate of tx , which effectively subsidizes domestically-produced movies. Is this policy consistent with a Pareto efficient allocation of resources? With the aid of social indifference curves, model a world in which consumers choose between two goods only, (taxed) “foreign movies”, good X, and (untaxed) “domestic movies” and all other goods, composite good Y. How does the marginal rate of substitution between the goods compare to the marginal rate of transformation algebraically and diagrammatically? Note that social indifference curves are defined over goods X and Y space whereas iso-welfare curves are defined over individual utilities.