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Lars Consumes Only Potatoes and Herring

question 5

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Lars consumes only potatoes and herring.When the price of potatoes was 9 crowns per sack and the price of herring was 5 crowns per crock, he spent his entire income to buy 5 sacks of potatoes and 10 crocks of herring per month.Now the government subsidizes potatoes.Market prices haven't changed, but consumers get a subsidy of 5 crowns for every sack of potatoes consumed.To pay for this subsidy, the government introduced an income tax.Lars pays an income tax of 20 crowns per month.If s is the number of sacks of potatoes and c is the number of crocks of herring, what is Lars's new budget equation?


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