Suppose that you had information that consumption expenditures for a particular good were a function of income, given by the relationship C = 1,200 + 0.3Y where C is consumption expenditure and Y is after-tax income. The legislature of your state is considering application of a 5% tax on this good.
a. Complete the following table of information.
b. Write a one-page policy briefing paper on the incidence of the proposed tax.