Question
Mr. A is suffering a certain disease and must take two pills of Medicine K every day. Regardless of how expensive Medicine K is, Mr.
Mr. A is suffering a certain disease and must take two pills of Medicine K every day. Regardless of how expensive Medicine K is, Mr. A must buy enough dosage for one week's use; otherwise, he has to switch to a cheaper substitute, Medicine L, which usually brings more side effects on patients. Assume that Mr. A can afford at most $3,500 on medicines every week. Estimate the general shape of the weekly demand curve on Medicine K for Mr. A.
Now, suppose that the government decided to split the carbon tax of $300 on airline companies and passengers evenly (that is, each party to pay $150 respectively to the government). When compared to the existing policy, this revised policy would:
a. reduce the real tax burden on passengers in economic term. b. increase the real tax burden on passengers in economic term. c. bring an uncertain change to the real tax burden on passengers in economic term. d. not change the real tax burden on passengers in economic term. a. b. C. increase the total tax revenue to government. decrease the total tax revenue to government. bring an uncertain change to the total tax revenue to government. not change the total tax revenue to government. When compared to the existing policy, this revised policy would result in: a. a decrease to the size of deadweight loss. b. the size of deadweight loss being doubled. c. a more than double increase to the size of deadweight loss. d. no change to the size of deadweight lossStep by Step Solution
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