Efficiency of the tax

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The small council was always searching for revenue to pay for President Wright's extravagant hunting trips. Phil Mathews argued that it would be best to tax drinks because everyone had to drink. Lord Music disagreed, saying that it would upset the citizens and put President Wright in danger. Instead Lord Music proposed taxing only Sprite because any citizen could easily avoid paying the tax if they wished by not drinking Sprite. Using a couple of graphs to illustrate your answer, explain how these two proposals differ in terms of the efficiency of the tax and who would end up paying the tax.

Reference no: EM132789950

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