2. Suppose a tax of $1 per pound is put on apples. (Be very brief in your answers.) a. What will happen to the output of peanuts (perhaps a substitute?) and the price to the sellers of peanuts? Draw a graph as part of your answer. b. Given that apples grow from plants that last a long time, and are not costless to remove, what will happen to the value of apple land? c. What will happen to the value of general farm tractors?

2. Suppose a tax of $1 per pound is put on apples. (Be very brief in your answers.) a. What will happen to the output of peanuts (perhaps a substitute?) and the price to the sellers of peanuts? Draw a graph as part of your answer. b. Given that apples grow from plants that last a long time, and are not costless to remove, what will happen to the value of apple land? c. What will happen to the value of general farm tractors?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 6PA

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