Suppose that the government tends to maximize the tax revenue. How would the cannabis price drop affect the government tax revenue if cannabis was taxed by price? Did the government anticipate the cannabis price drop when designing the tax scheme? You may come up with an artificial numerical example to support your findings. are alcohol and cigarettes substitutes or complements of cannabis? (The answer to this question depends on the actual consumption data. If you do not know the data, you may make an assumption. Then, you should stick with this assumption for the rest of your analysis. For example, if you assume that alcohol and cigarettes are substitutes of cannabis, then your entire analysis is based upon this assumption.) How would the change in the price of cannabis possibly affect the market demand curve for alcohol/cigarettes?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question
  • Suppose that the government tends to maximize the tax revenue.
  • How would the cannabis price drop affect the government tax revenue if cannabis was taxed by price?
  • Did the government anticipate the cannabis price drop when designing the tax scheme?
  • You may come up with an artificial numerical example to support your findings.
  • are alcohol and cigarettes substitutes or complements of cannabis?
    (The answer to this question depends on the actual consumption data. If you do not know the data, you may make an assumption. Then, you should stick with this assumption for the rest of your analysis. For example, if you assume that alcohol and cigarettes are substitutes of cannabis, then your entire analysis is based upon this assumption.)
  • How would the change in the price of cannabis possibly affect the market demand curve for alcohol/cigarettes?
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Tax Revenue
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education