One rationale for imposing taxes on alcohol consumption is that people who drink alcohol impose negative spillovers on the rest of society—for example through loud and unruly behavior or intoxicated driving. If this rationale is correct, in the absence of governmental taxation, will people tend to consume too much, too little, or the right amount of alcohol?
Answer to relevant QuestionsWhat is the role of the Congressional Budget Office (CBO)? Why is independence and impartiality important when conducting empirical analyses? Many states have constitutional requirements that their budgets be in balance (or in surplus) in any given year, but this is not true for the U.S. federal government. Why might it make sense to allow for deficits in some ...Consider the utilitarian social welfare function and the Rawlins social welfare function, the two social welfare functions described in Chapter 2. a. Which one is more consistent with a government that redistributes from ...You have $3,000 to spend on entertainment this year (lucky you!). The price of a day trip (T) is $40 and the price of a pizza and a movie (M) is $20. Suppose that your utility function is U(T,M) = T1/3M2/3. a. What ...A study in the Annals of Improbable Research once reported that counties with large numbers of mobile home parks had higher rates of tornadoes than did other counties. The authors conclude that mobile home parks cause ...
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