(Answered) Alices utility function is such that she is always

Management Studies

Alice's utility function is such that she is always indifferent between 1 unit of x and3 units of y. Suppose initially px = 2, py = 1, and I = 10. Alice chooses x and y tomaximize her utility. Then the government imposes a 100% sale tax on x (the priceof x doubles). How much MORE does the person have to earn in order to achieve the same level of utility as before? (Find the increase in income required to achieve thesame utility level)

Please give the explanation for the answer

(a) 0

(b) 5

(d) 18

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