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1. Consider two different tax policies: a $1 per unit tax on the production of good x (where the total b amount produced by each

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1. "Consider two different tax policies: a $1 per unit tax on the production of good x (where the total b amount produced by each firm is 1000 units) or a $1000 lump sum tax paid by each firm. Assume the number of firms that can't absorb the tax (in the form of reduced fixed costs) is the same in both instances. Then the per unit tax will generate more tax revenue for the government." True/False. Explain. [Hint: you will probably want to sketch out each of these scenarios, particularly the first, to help guide you to the answer.]

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