In recent years, a number of states have instituted taxes on patrons of nude and topless dance bars. Such taxes are known as “sin taxes,” because they target behavior that is believed to be sinful. How do sin taxes relate to the notion of merit goods?
Answer to relevant QuestionsIn each case listed below, can you rationalize the government policy on the basis of welfare economics? a. In Los Angeles, the police respond to 127,000 burglar alarm calls per year. There is no charge. (Ninety- seven ...Suppose that Hannah’s utility function is U H = 3 T + 4 C and that Jose’s utility function is U J = 4 T + 3 C , where T is pounds of tea per year and C is pounds of coffee per year. Suppose there are fixed amounts of 28 ...In order to respond to the tastes of its patrons, Fairfax County Public Library discards books that have not been checked out in two years in order to make space for more popular books [Miller, 2007]. This policy led them to ...In the following figure, the number of parties that Cassanova gives per month is measured on the horizontal axis, and dollars are measured on the vertical. MCp is the marginal cost of providing parties and MBp is ...Figure 5.11 demonstrates the efficiency implications of using cap- and- trade versus an emissions fee when costs are higher than expected and marginal social benefits are inelastic. Figure 5.12 does the same thing under the ...
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