The U.S. government introduced a variety of price controls in the 1970s, including controls on gasoline...

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The U.S. government introduced a variety of price controls in the 1970s, including controls on gasoline prices. The result was long lines at the pumps for fuel. If the government had not instituted the price controls, what would have happened? The St Lawrence County legislature needs some cash and has imposed a $3.00 tax on all Hostess Twinkies sold in the county. Because we eat a collective total of 10,000 Twinkies a month here, they expect to raise $30,000 a month in tax revenues. Are they likely to raise this amount? Explain why or why not, using the concepts of supply and demand and taxation, including the Laffer curve. What general economic effect will they get by imposing this tax? The U.S. government introduced a variety of price controls in the 1970s, including controls on gasoline prices. The result was long lines at the pumps for fuel. If the government had not instituted the price controls, what would have happened? The St Lawrence County legislature needs some cash and has imposed a $3.00 tax on all Hostess Twinkies sold in the county. Because we eat a collective total of 10,000 Twinkies a month here, they expect to raise $30,000 a month in tax revenues. Are they likely to raise this amount? Explain why or why not, using the concepts of supply and demand and taxation, including the Laffer curve. What general economic effect will they get by imposing this tax?

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1 If the US government had not introduced price controls on gasoline in the 1970s the market would h... View the full answer