What would be the economic implications for sex workers

Assignment Help Microeconomics

Reference no: EM131500029

Question: In 2004, the city of Cologne, Germany instituted a "pleasure tax." Among other things, the tax applied to massage parlors, table-dancing clubs, and brothels. Many sex workers complained that the tax was unjust because it was levied on them rather than on the men who patronize their services. One sex worker said "I can't increase what I charge" to make up for the tax increase.

a. Implicit in the sex workers assertion is an assumption about the elasticity of demand for her services. What is that assumption and do you think it is realistic?

b. What would be the economic implications for sex workers if the tax was instead levied on their patrons?

Reference no: EM131500029

Questions Cloud

How much of the third loan payment is interest : How much of the third loan payment is interest?

What percent of peters after tax income is replaced by ui : Peters earnings are taxed at a rate of 15 percent by the personal income tax and at a combined rate of 7.45 percent by the Social Security and Medicare payroll.

Alternative trading systems and registered stock exchanges : Describe some similarities and differences among broker-dealer networks, alternative trading systems (ats), and registered stock exchanges.

Explain how abc creates thee given benefits : Explain how ABC creates these benefits. Explain how this additional information could help you in your analysis? Determine other information to gather.

What would be the economic implications for sex workers : In 2004, the city of Cologne, Germany instituted a "pleasure tax." Among other things, the tax applied to massage parlors, table-dancing clubs, and brothels.

Under what conditions is this view likely to be correct : In 2004, Congress adopted a Medicare prescriptivism drug benefit which would, in effect, subsidize the purchase of drugs by the elderly.

Range of stock prices would butterfly spread lead to loss : what range of stock prices would the butterfly spread lead to a loss?

Pecking order theory : In his Pecking Order Theory, Stewart Myers argues that managers should consider cost of obtaining various types of external financing in capital structure

What will be the new price per share after the repurchase : What will be the new price per share after the repurchase?

User Account

All Pages