Which good should the government impose the tax if it needs

Assignment Help Business Economics

Reference no: EM1346134

Suppose that you work on a government tax committee. You have been given approval to levy a $5-per-unit tax on the producers of one of the following two goods: economics books or chemistry books. Supply and demand for both types of books are given below:

QD = 200 - 15P and QS = 5P for economics books
QD = 100 - 5P and QS = 5P for chemistry books

a. On which good should the government impose the tax if it wants to maximize government revenue? Show work by calculating tax revenue in each case.

b. On which good should the government impose the tax if it wants to minimize deadweight loss? Show work by calculating deadweight loss in each case.

c. Provide an economic explanation for your findings in parts a and b.

Reference no: EM1346134

Questions Cloud

What is the relation their inertias : How much horizontal force should a sprinter of mass 57.0 exert on the starting blocks to produce this acceleration.

Show the organization to the media attention : Two key messages that you want to be sure to convey to the public when answering media questions and risks involved in exposing the organization to the media attention.

How to compute the induced emf : define the hazards for astronauts inside any spacecraft moving in the vicinity of a pulsar.

Calculate the target cost per unit : Baker Plumbing Fixtures is creating a pre-plumbed acrylic shower unit. The team creating the product includes representatives from engineering, marketing, & cost accounting.

Which good should the government impose the tax if it needs : which good should the government impose the tax if it needs to maximize government revenue

How much charge does the battery move : Cowboy joe wishes to shoot his assaiat by ricocheting a bullet off a mirrored metal plate. To do so, must he simply aim at the mirrored image of his assaiant? Explain.

How far the point of release is the tuning fork : A massless spring with spring constant 22.10 N/m hangs vertically. A body of mass 0.280 kg is attached to its free end and then released. Assume that the spring was unstretched before body was released. How far below the initial position does the ..

Discuss impact on savings burden in investment markets : Why does the tax value for an inclusive us tax that is created to replace an equal-yield comprehensive income tax have to be higher than income tax rate?

Elucidate what will happen to the equilibrium price : Elucidate what will happen to the equilibrium price and quantity of pizzas sold and why (which curve has changed) for each of the following situations:

User Account

All Pages