Proposal, Microeconomics

#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..
Posted Date: 3/8/2013 3:20:06 PM | Location : United States







Related Discussions:- Proposal, Assignment Help, Ask Question on Proposal, Get Answer, Expert's Help, Proposal Discussions

Write discussion on Proposal
Your posts are moderated
Related Questions
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

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Indifference curves present all possible combinations of market baskets that give the similar level of satisfaction to a person. Indifference Curves 1. Indifferen


discuss the implications of various market structures(competitive and non-competitive) for price determination

Compare and contrast the different measures of revenue

Theories of Chamberlin’s monopolistic competition and Joan Robinson’s imperfect competition have revealed that a firm under monopolistic competition or imperfect competition in lon

Traditional inventory control based on the calculation of EOQ   At this point, it is worth considering some of the problems faced by companies using the simple inventory model

Dance fans switches away from Dance music to R&B music AND the price of MP3 players increases

Use of Resources - INTERNATIONAL MONETARY FUND: IMF provides temporary assistance to member-countries to tide over balance of payments deficits. When the country requires fore