1.3 Consider a simple Asian economy with only four markets (energy, food, labour, and capital) and two...

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1.3 Consider a simple Asian economy with only four markets (energy, food, labour, and capital) and two types of households (rich and poor). Explain why an excise tax on energy is likely to hurt white collar households more than the blue collar households, despite expectations that the opposite would be true. Assume that the proceeds of the state energy tax are used to finance infrastructural developments such as construction activities.

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Principles Of Microeconomics

ISBN: 9789813107342

12th Global Edition

Authors: Karl E. Case, Sharon E. Oster, Ray C. Fair

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