Consumption pattern and welfare be affected

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Q1. Suppose that any punitive damages awarded to the plaintiff were to be paid, not to the plaintiff, but rather to, say, a charity designed by the plaintiff. How the plaintiffs' incentive to seek punitive damages might be affected by such a scheme, and how might the jury's disposition to award punitive damages be affected?

Q2. With an excise tax of $0.20 per six-pack, Kristine purchases three six-packs of Diet Coke for every day. If the government eliminates the excise tax and, instead, requires Kristine to pay $0.60 per day lump-sum tax (the daily tax liability is $0.60 regardless of how much Diet Coke Kristine consumes), how will Kristine s consumption pattern and welfare be affected?

Reference no: EM138197

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