Proposal, Microeconomics

Assignment Help:
#quesSuppose that two anti-marijuana proposals are currently being debated in Congress. Proposal I will reduce the supply of marijuana and cause its price to rise by 7%. Proposal II will reduce the tax on beer and cause its price to fall by 5%. Based on recent estimates, the price elasticity of demand for marijuana is 1.10 and the cross-price elasticity of demand between marijuana and beer is 1.30. If the only objective of the anti-marijuana proposals is to reduce marijuana consumption by the greatest amount, which proposal would you recommend and by how much will it reduce consumption? tion..

Related Discussions:- Proposal

Theory of production and cost, • Production Function . The factors of produ...

• Production Function . The factors of production have to be combined in a particular manner to produce a certain product. Think of baking a cake which involves mixing fixed propor

1, a) Consider the following flows (in thousand of people) between the vari...

a) Consider the following flows (in thousand of people) between the various labour market states in a particular month: UE = 240 000; UNLF = 180 000; EU = 190 000; NLFU = 220 000

Consumer and producer surplus, Evaluating  the Gains and Losses from the P...

Evaluating  the Gains and Losses from the Policies of Government:  Consumer and Producer Surplus * Review - Consumer surplus is total benefit or value which consumers rece

Production theory, why does gap between the ATC curve and the AVC curve dec...

why does gap between the ATC curve and the AVC curve decreases as the level of output increases

How would the price mechanism decide resource allocation, How would the pri...

How would the price mechanism decide resource allocation in a competitive (free) market? The main issue it to explain how the price mechanism has a signalling, rationing and ince

Economic rent, Economic Rent - Economic rent is difference between what...

Economic Rent - Economic rent is difference between what firms are willing to pay for the input less the minimum amount required to obtain it. * An Example - There are tw

Narrowness of definition of the commodity, Question : (a) Explain why...

Question : (a) Explain why each of the following factors may influence the own price elasticity of demand for a commodity. (i) Consumer preferences, that is, whether c

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd