Suppose the economy of Kyrgyzstan has only four marketsenergy, food, labor, and capitaland two types of householdsrich


Suppose the economy of Kyrgyzstan has only four markets—energy, food, labor, and capital—and two types of households—rich and poor. In such an economy, explain why an excise tax on energy is likely to hurt white collar households more than blue collar households despite expectations that the opposite would be true. Assume that the proceeds from the state tax on energy are used to finance infrastructural developments such as construction activities.

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Principles Of Economics

ISBN: 9781292294698

13th Global Edition

Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster

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