Justin considers coke (x1) and diet coke (x2) to be perfect substitutes

Justin considers coke (x1) and diet coke (x2) to be perfect substitutes. Currently, the price of coke is $0. 40 per can, the price of diet coke is $0. 50 per can, and Justin has $20 to spend per month. a) What is Justin’s optimal consumption bundle at current prices and income?b) Assume there is a new public health campaign to discourage the consumption of sugar sweetened beverages. The specific public health policy imposes a 25% tax on sugary beverages (such as coke) but not beverages containing artificial sweeteners (such as diet coke). What is Justin’s new optimal consumption bundle after the tax is imposed? Does this public health campaign have the desired effect on Justin’s consumption?c) I Justin better off or worse after the 25% tax on sugary beverages (such as coke) is introduced?

Justin considers coke (x1) and diet coke (x2) to be perfect substitutes.

Justin considers coke (x1) and diet coke (x2) to be perfect substitutes. Currently, the price of coke is $0.40 per can, the price of diet coke is $0.50 per can, and Justin has $20 to spend per month.

a) What is Justin’s optimal consumption bundle at current prices and income?

b) Assume there is a new public health campaign to discourage the consumption of sugar sweetened beverages. The specific public health policy imposes a 25% tax on sugary beverages (such as coke) but not beverages containing artificial sweeteners (such as diet coke). What is Justin’s new optimal consumption bundle after the tax is imposed? Does this public health campaign have the desired effect on Justin’s consumption?

c) I Justin better off or worse after the 25% tax on sugary beverages (such as coke) is introduced?