Suppose that the government decides that the level of


Suppose that people derive utility from two goods---housing (H) and all other consumption goods(C).

a. Show a typical consumer's allocation of his or her income between H and C

 

b. Suppose that the government decides that the level of housing shown in part a(say, H*) is "substandard" and requires that all people buy H**>H* instead. Show that these las would reduce this person’s utility.

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Business Economics: Suppose that the government decides that the level of
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