Problem
Goolsbee (2000) found that people who live in high sales tax areas are much more likely than other consumers to purchase over the Internet, where they are generally exempt from the sales tax if the firm is located in another state. The National Governors Association (NGA) proposed a uniform tax of 5% on all Internet sales. Goolsbee estimates that the NGA's flat 5% tax would lower the number of online customers by 18% and total sales by 23%. Alternatively, if each state could impose its own taxes (which average 6.33%), the number of buyers would fall by 24% and spending by 30%. Use an indifference curve-budget line diagram to illustrate the reason for his results.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.