(a) Shortly explain the relationship between elasticity of a good and the consumption tax rate itshould be imposed upon it.(b) What do we man by rivalry of a good? Give examples of rival and non-rival goods. To whatextent is rivalry a crucial aspect of a public good?(c) Give examples of positive and negative production and consumption externalities. (so you needto give 4 examples in total)(d) Explain whether the Coase theorem is useful in practice.(e) Define vertical and horizontal equity objectives of a tax system. Which one do you think is moreimportant in establishing equity and/or fairness?(f) What are the political implications of the First and Second Welfare theorems? Shortly explain. 3

Though they are mentioned as sub-parts, they are different questions. Hence, answering the first one…

Answered: (a) Shortly explain the relationship…

(a) Shortly explain the relationship between elasticity of a good and the consumption tax rate it should be imposed upon it.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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