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Question: Question 4: Reducing smoking in an election (from Lima) [60 points] A candidate in a city's elect...Question: Question 4: Reducing smoking in an election (from Lima) [60 points] A candidate in a city's elect...

Show transcribed image text Question 4: Reducing smoking in an election (from Lima) [60 points] A candidate in a city's electoral race for mayor wants to reduce cigarette smoking in the city. Assume that the city's citizens order their preferences over beer and cigarettes according to the following utility function: The price of a beer bottle equals 2 dollars per bottle and the price of cigarettes equals 10 dollars per pack. Assume that the typical consumer's income equals 100 dollars. Finally, assume that the typical consumer will vote for the candidate if and only if his policies do not change his or her level of utility. 1. Write down the typical consumer's IUMP]. Be very precise. [3 points 2. How many packs of cigarettes does the representative consumer buy? How many bottles of beer? 5 points 3. On a graph, plot your solution and draw the budget line in black ink. Label the optimal bundle with the letter O. 12 points]

Question 4: Reducing smoking in an election (from Lima) [60 points] A candidate in a city's electoral race for mayor wants to reduce cigarette smoking in the city. Assume that the city's citizens order their preferences over beer and cigarettes according to the following utility function: The price of a beer bottle equals 2 dollars per bottle and the price of cigarettes equals 10 dollars per pack. Assume that the typical consumer's income equals 100 dollars. Finally, assume that the typical consumer will vote for the candidate if and only if his policies do not change his or her level of utility. 1. Write down the typical consumer's IUMP]. Be very precise. [3 points 2. How many packs of cigarettes does the representative consumer buy? How many bottles of beer? 5 points 3. On a graph, plot your solution and draw the budget line in black ink. Label the optimal bundle with the letter O. 12 points]