Explain in your own words why a gasoline tax whose proceeds are refunded to the consumer in a lump- sum amount will nonetheless reduce the consumption of gasoline.
Answer to relevant QuestionsExplain in your own words what a two-part pricing scheme is and why sellers might use one.When the price of gasoline is $1/gal, you consume 1000 gal/ yr. Then two things happen: (1) The price of gasoline rises to $2/gal and (2) a distant uncle dies, with the instruction to his executor to send you a check for ...Find the present value of $50,000 to be received after 1 year if the annual rate of interest isa. 8 percent b. 10 percent c. 12 percentHarry runs a small movie theater, whose customers all have identical tastes. Each customer’s reservation price for the movie is $5, and each customer’s demand curve for popcorn at his concession stand is given by Pc = 4 ...It is known that some fraction d of all new cars is defective. Defective cars can-not be identified as such except by the people who own them. Each consumer is risk neutral and values a non-defective car at $6000. New cars ...
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