Question

Schmeezle and Schmoozle are two advisors for the government of Feldspar. Schmeezle says that since the elasticity of demand for granite countertops is –3 and the elasticity of demand for sinks is –1.5, taxes should be raised entirely from granite countertops. Schmoozle argues that it is better to levy taxes on both goods anyway. Which advisor should the Feldspar government listen to? Why?


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  • CreatedApril 25, 2015
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