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Unformatted text preview: tax? 2. Why would a 10-percent national land tax on rents be likely to have zero excess burden? 3. Explain why the excess burden of a lump-sum tax will always be zero. 4. The annual demand for liquor is given by Q D = 50 20P, where P is the price, and Q D is the quantity demanded. The supply of liquor is given by Q S = 30P. Suppose that a $1 per litre tax is levied on the price of liquor received by sellers. Calculate the excess burden of the tax, the amount of tax revenue collected, and the incidence of tax between producers and consumers....
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This note was uploaded on 04/15/2010 for the course ECON 290 taught by Professor J liu during the Spring '06 term at Simon Fraser.
- Spring '06
- J Liu