The state of pennsylvania is considering increasing taxes

Reference no: EM13842938

The state of Pennsylvania is considering increasing taxes in order to raise funding for a new Punxsutawney Phil theme park. The government is concerned about the deadweight losses that could result from the new "Punxsutawney tax." Currently the two potential taxes are (1) a sales tax on fruits and vegetables purchased at farmer's markets, or (2) a sales tax on cigarettes. Which good should the government tax if they wish to minimize the deadweight losses of taxation? Your answer should be based on elasticities and nothing more.

Reference no: EM13842938

Questions Cloud

The opportunity to buy a tract of land under : (40%) Bubba Wildcat has the opportunity to buy a tract of land under which he believes there is oil with 0.40 probability and natural gas with .60 probability. After buying the land he can choose to make a test drill for $10,000 to gather more inform..

What is the value of the firms equity : What is the PV of operating cash flows over the competitive advantage period? What is the residual value of the firm after the period of competitive advantage? What is the value of the firm's equity?

How can inflation affect a business in the short-term : How can inflation affect a business in the short-term and long-term? Please back up your argument with at least 500 words in your explanation.

Business plan on bar and cafe : business plan on bar and cafe

The state of pennsylvania is considering increasing taxes : The state of Pennsylvania is considering increasing taxes in order to raise funding for a new Punxsutawney Phil theme park. The government is concerned about the deadweight losses that could result from the new "Punxsutawney tax." Currently the two p..

Three bayes rule problems : EYEWITNESS TESTIMONY. A man was struck by a speeding taxi as he crossed the street. Aneyewitness testified the taxi (which did not stop) was blue. The man sued the Blue Cabcompany for his medical expenses. The city has only two cab companies, Blue Ca..

Forthcoming annual enrollment period : The employee manager of a large company would like to estimate the proportion of full-time employees who prefer adopting plan A of two available health care plans in the forthcoming annual enrollment period.

Explain why an anova was used to analyze : Difference in the mean prices between the three stores? What is the p-value? Explain why an ANOVA was used to analyze this problem.

Case - johnson- estate planning to reduce tax liability : ASE - Johnson: Estate Planning to Reduce Tax Liability. "Roth" retirement plans are encountered with increasing frequency among estate planning clients, especially since (beginning in 2010) the availability of Roth "conversions" was extended to hig..

User Account

All Pages