Assignment 2 (KM)
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- 3. A subsidy is opposite of a tax. i.e. it is a payment from the government to people. Consider a proposal that pays a $10.00 per credit hour subsidy to UCO students. Suppose further that the elasticities of supply and demand are equal to one in the UCO
- 2. Suppose the state legislature proposed a $1.00 per-unit (pack) excise tax on cigarettes to be imposed legally or statutorily on cigarette sellers. Some news reports have suggested that the proposed tax would increase cigarette prices by $1.00 per pack
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