Question

the(sellerg of certain 1. The Korean government is considering imposing taxes on classes of products. The first tax they are considering is a tax on rice. The second is a tax on all grains including rice, barley, wheat and corn. The third is a tax on all food products. Assume that the price elasticity of supply is the same for all food products but the price elasticity of demand varies. Please answer to the following questions by drawing the demand and supply curves. (1) Which of these three taxes would you expect to have the largest impact on the sticker prices of the taxed products? (2) Please explain who will bear more tax burden after each different tax policy

Answer 1

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