The scenario
A consumer faces a per-unit tax on gasoline, which effectively increases its price and rotates the budget line inward along the gasoline axis, altering the affordable consumption set.
What is in this drawing
Read the decisions behind it.
01
Model tax as an additive disturbance to base price via sum junction
02
Represent budget constraint as a generic block mapping price and income to quantities
03
Use external income signal to feed into the constraint block
When teaching or analyzing how excise taxes distort budget constraints and influence consumer equilibrium.
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