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Problem 6 Taxation: The US. Senate is considering a bill that would tax the sale of laptop computers _i_I_1_gr_(_i_e_1j_to_ fund a computer education program for
Problem 6 Taxation: The US. Senate is considering a bill that would tax the sale of laptop computers _i_I_1_gr_(_i_e_1j_to_ fund a computer education program for presidential hopefuls. The Congres- sional Budget Office (CBO) estimates that if it implements a low tax of $12 per laptop, revenue should be sufficient to exactly fund the program. The CBO also estimates that a high tax of $230 per laptop will exactly fund the program. a) How can a low tax and a high tax raise exactly enough money to fund the program? Illustrate your answer using a graph. b) Suppose that you are an economic advisor to the Senate Finance Committee, tasked with analyzing the economic impact of the tax proposals. Which proposal do you recommend, and why? c) Would your answer to b) change if recent research found that laptop computers are environ mentally harmful (battery)
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