The government decides to tax cookbooks because they feel


The government decides to tax cookbooks because they feel that they encourage overeating and can lead to health issues, such as obesity and heart disease. Answer the following:

· What type of tax is this? Explain.

· What happens to the supply of cookbooks?

· What happens to the equilibrium price?

· Who pays the tax at the end?

· Is this a good way to finance programs to improve health?

· What other types of tax can the government use to increase revenues?

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Business Economics: The government decides to tax cookbooks because they feel
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