Problem 1: After economics class oneday, your friend suggests that taxingfood would be a good way to raiserevenue because demand for foodis relatively inelastic. In what senseis taxing food a "good" way to raiserevenue? In what sense is it not a goodway to raise revenue?Problem 2: The government intends toplace a tax on digital platforms suchas Netflix, Spotify, HBO, etc. as well asonline shopping apps like Lazada andZalora. The tax may either be placedon the seller or consumer, dependingon the final design. Consider that thesupply for these online platforms andshopping apps is relatively elastic.To answer this recall lesson aboutelasticities and basic principles of tax.3. Suppose that government decidesto place the tax on consumers, i.e.,tax on subscription fees for digitalplatforms and VAT for online shoppingapps. Assume that there is equal levelsof elasticities for both consumer andproducer. Who bears the economiccost of the tax?A. ConsumerB. BothC. ProducerD. Government4. Based on the previous question/s,suppose now that supply is relativelymore elastic than demand. Who bearsthe economic cost of the tax?A. ConsumerB. BothC. ProducerD. Government5.Assume that you are a lawmaker.Would you vote in favor of or againsttaxing online apps/ platforms? Explain

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Problem 1: After economics class one day, your friend suggests that taxing food would be a good way to raise revenue because demand for food is relatively inelastic. In what sense is taxing food a "good" way to raise revenue? In what sense is it not a good way to raise revenue?

Problem 1: After economics class one day, your friend suggests that taxing food would be a good way to raise revenue because demand for food is relatively inelastic. In what sense is taxing food a "good" way to raise revenue? In what sense is it not a good way to raise revenue?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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