c.Is she better or worse off when given a rebate equal to the sales tax payments?Draw a graph and explain. Felicia is likely to be better off after the rebate.The am ount of the rebate is enough to allow her to purchase her original bundle of food and other goods Recall that originally she consumed 5000 units of food.When the price went up by fifty cents per unit.she needed an extra 5000*S0.50=52.500 to afford the same quantity of food without reducing the quantity of the other goods consumed.This is the exact amount of the rebate.However,she did not choose to return to her priginal bundle. 1。 her a higher level of utility.In the graph below,when the price of food increases. the budget line will pivot inwards.When the rebate is given,this new budget line will shift outwards.The bundle after the rebate is on that part of the new budget line that was previously unaffordable.and that lies above the original ther goc bundle after rebate original bundle food c. Is she better or worse off when given a rebate equal to the sales tax payments? Draw a graph and explain. Felicia is likely to be better off after the rebate. The amount of the rebate is enough to allow her to purchase her original bundle of food and other goods. Recall that originally she consumed 5000 units of food. When the price went up by fifty cents per unit, she needed an extra 5000*$0.50=$2,500 to afford the same quantity of food without reducing the quantity of the other goods consumed. This is the exact amount of the rebate. However, she did not choose to return to her original bundle. We can therefore infer that she found a better bundle that gave her a higher level of utility. In the graph below, when the price of food increases, the budget line will pivot inwards. When the rebate is given, this new budget line will shift outwards. The bundle after the rebate is on that part of the new budget line that was previously unaffordable, and that lies above the original indifference curve. original bundle bundle aft er rebat e food ot her good