The government decides to impose a unit-tax on producers instead of a unit-sales tax on consumers, arguing that this will protect consumers from negative effects of the tax. Your response to this statement should be that O This is incorrect reasoning, because consumers actually will be affected more by the tax on production than a sales tax O This is incorrect reasoning, because consumers are always hit harder by a sales tax O This is incorrect reasoning, because it doesn't matter whether the tax is imposed on sales or production, the impact is the same O This is the correct reasoning, because consumers do not pay for the production.
a)
The government decides to impose a unit-tax on producers instead of a unit-sales tax on consumers, arguing that this will protect consumers from negative effects of the tax. Your response to this statement should be that
O This is incorrect reasoning, because consumers actually will be affected more by the tax on production than a sales tax
O This is incorrect reasoning, because consumers are always hit harder by a sales tax
O This is incorrect reasoning, because it doesn't matter whether the tax is imposed on sales or production, the impact is the same
O This is the correct reasoning, because consumers do not pay for the production.
b)
Tom likes eBooks and iTunes. eBooks cost $4 and provide a
O Buy more eBooks and fewer iTunes
O Buy fewer eBooks and more iTunes
O Not change his current consumption choice
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