Economics - Week 3 Assignment Ending each chapter and...

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Week 3 Assignment Ending each chapter and appendix in the text are the chapter summary, terms and concepts, and study questions. You are to review the chapter summary and the terms and concepts and then prepare answers to the following study questions. Chapter 4: # 4, 5 (parts a, d, e, f, and g), and 8 #4. You are chairman of a state tax commission responsible for establishing a program to raise new revenue through excise taxes. Why would elasticity of demand be important to you in determining the products on which the taxes should be levied? LO4 Elasticity of demand is very important if the government wants to raise revenue based on a tax levy. The analysis is the same as above for demand. The tax would represent, for consumers, a price increase. This means that the government cannot count on collecting the amount of tax based on current consumption levels of the products being taxed. With a price increase (caused by the tax), it would have to take into consideration that the quantity demanded will decrease. The amount by which this demand will decrease will be determined by the
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