An Agent Consumes Goods $x$ And $y$ , with Prices $P _ { x } = \$ 5$

question 54

Multiple Choice

An agent consumes goods $x$ and $y$ , with prices $P _ { x } = \$ 5$ per unit and $P _ { y } = \$ 8$ per unit. The consumer's income is $I = \$ 48$ . The government imposes a tax of $\$ 1$ per unit on good $x$ . What is the new equation for the budget constraint?

• A) \(y = 6 - ( 5 / 8 ) x\)
• B) \(y = 6 - .75 x\)
• C) \(y = 8 - ( 6 / 8 ) x\)
• D) \(y = 48 - 8 x\)

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Definitions:

Asset Investment

The allocation of resources into physical or financial assets with the expectation of generating future returns.

Acquisitions

The process by which a company buys most or all of another firm's shares in order to take control.

Dividends In Arrears

Dividends on preferred stock that have been declared but not yet paid to shareholders.

Cumulative Preferred Stock

A type of preferred stock that accrues dividends if they are not paid in the year they are due, with these dividends being required to be paid out before any dividends can be paid to common stockholders.