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Suppose the government established a new program that would use revenues from a payroll tax to finance 85 percent of the maintenance and repair cost of automobiles incurred by those who are employed. How would this legislation influence (a) the prices of auto repair and maintenance services, (b) total spending on these services, and (c) the cost of this program in the years immediately ahead? Do you think this program should be adopted? Why or why not?

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Microeconomics: Private and Public...

16th Edition
James D. Gwartney + 3 others
Publisher: Cengage Learning
ISBN: 9781305506893
BuyFind

Microeconomics: Private and Public...

16th Edition
James D. Gwartney + 3 others
Publisher: Cengage Learning
ISBN: 9781305506893

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Chapter
Section
Chapter ST7, Problem 7CQ
Textbook Problem

Suppose the government established a new program that would use revenues from a payroll tax to finance 85 percent of the maintenance and repair cost of automobiles incurred by those who are employed. How would this legislation influence (a) the prices of auto repair and maintenance services, (b) total spending on these services, and (c) the cost of this program in the years immediately ahead? Do you think this program should be adopted? Why or why not?

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