What is a sumptuary tax? Give an explanation for how cigarette taxes could be justified as a sumptuary tax. Give an explanation for why cigarette taxation might not, in actuality, achieve the goal of sumptuary taxation
What will be an ideal response?
A sumptuary tax is a tax designed to discourage the consumption of the good being taxed. One possible justification for cigarette taxation as a sumptuary tax is that the consumption of cigarettes by some individuals makes others worse off and thus society wants to discourage the consumption of cigarettes. If the goal is to discourage consumption of cigarettes, a tax on cigarettes is unlikely to discourage consumption very much given the inelastic demand curve for cigarettes. This means a sumptuary tax on cigarettes is unlikely to reduce consumption very much, thus not achieving the sumptuary taxation goal.
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Recently economists have added what factor as a major explanation of economic growth?
A) the growth rate of labor B) the growth rate in labor and capital productivity C) technology D) the growth rate of capital
An increase in saving that leads to more capital accumulation ________ labor productivity
A) increases B) does not change C) decreases D) probably changes but in an ambiguous direction
Larissa is a famous attorney with a great reputation in court. She charges her clients $300 for each hour she spends working on their cases. If she earned $450,000 in hourly wages last year, and by raising her rates to $350 per hour her income increased to $490,000 what can we say about the elasticity of demand for Larissa's legal services?
a. It is approximately equal to 2.3. b. It is approximately equal to 1.6. c. It is approximately equal to 1.0. d. It is approximately equal to 0.45. e. It is approximately equal to 0.1.
To compute national income from GDP,
A. national income is first calculated, and then depreciation of capital and indirect business taxes are subtracted from it to get GDP. B. GDP is first calculated, and then gross private domestic investment is subtracted from it to get national income. C. GDP is first calculated, and then capital depreciation and proprietors' income are subtracted from it to get national income. D. GDP is first calculated, and then depreciation of capital is subtracted from it to get national income.