Table 1
Qualitative Sign of the Change in Demand for
x
2
Given Imposition of a Dedicated Tax
t
2
Relationship between
x
2
and
X
3
π
3
<1
π
3
=1
π
3
>1
Hicksian complements
?
+
+
Hicksian substitutes
−
−
?
Note:
: Quasi-linear preferences are assumed.