Suppose the local government at a very popular tourist destination (Paris, Venice, etc.) is considering imposing a tax on hotel rooms.

 a) Are they likely going to be able to set a higher tax rate than would be found in a less popular destination? 

b) Would this be an example of taxing economic rent? (explain)

Answer rating: 100% (QA)

a Yes the local government at a very popular tourist destination like Paris or Venice would likely b... View the full answer