What income tax rate is equivalent to this commodity tax

Assignment Help Microeconomics

Reference no: EM133436013

Assignment:

Kevin has an income of $Y and spends it only on food and music. PF and PM denote the prices of food and music, respectively, and quantities os denoted by QF and QM . In the absence of taxes, Kevin's budget constraint is Y = PF*QF + PM*QM . Now suppose an ad valorem tax of 25 percent is imposed on both food and music. What income tax rate is equivalent to this commodity tax?

Reference no: EM133436013

Questions Cloud

What is the face value of the the ten bonds : Ten bonds are purchased for $9,083.25 and are kept for 5 years. The bond coupon rate is 5% per year, payable annually.

Consider a machine that will reduce after-tax operating cost : Consider a machine that will reduce after-tax operating costs by $2,500 per year over a five- year period. Assume no changes in net working capital

Explain the source focusing on describing : explain the source focusing on describing your source, such as the author's qualifications and why was the source created. Describe the main ideas, arguments

What type of post-acute care (pac) does coastal medical : What type of post-acute care (PAC) does Coastal Medical Center (CMC) provide? What is its competition in this area?

What income tax rate is equivalent to this commodity tax : Now suppose an ad valorem tax of 25 percent is imposed on both food and music. What income tax rate is equivalent to this commodity tax?

Prepare the entries to record sales and collections : Prepare the entries to record sales and collections during the period. Prepare the entry to record the write-off of uncollectible accounts during the period

Discuss some processes of employment relations : Discuss some processes of employment relations that you have come across in your reading? Provide specific examples from the reading

What is economic surplus-loss of karl buying new model : What is the economic surplus/loss of Karl buying the new model chainsaw? Answer to the nearest whole number (with no decimal places or $ sign.

What are the investments that dr allen might have made for : what are the investments that Dr Allen might have made for starting the door to door veterinay service with explanation and references

User Account

All Pages