Suppose the income elasticity of demand for the food is 0.5 and the price elasticity demand is 1.0 Suppose also the Sam
Posted: Thu May 05, 2022 7:39 am
Suppose the income elasticity of demand for the food is 0.5 and
the price elasticity demand is 1.0 Suppose also the Sam spends
1,00,000 on food the price unit of food is 20and that her income is
2,50,000
If the sales tax on food caused the price of food to
increase to Rs 25 what would happen to her consumption of food
?
Suppose sam gets a tax rebate of 25,000 to ease the affect of
the sales tax what would her consumption of food be now ?
Is she better off or worse off in terms of the food consumption
when given a rebate equal to the amount by which her food
consumption declined after the sales tax on the price of food ?
the price elasticity demand is 1.0 Suppose also the Sam spends
1,00,000 on food the price unit of food is 20and that her income is
2,50,000
If the sales tax on food caused the price of food to
increase to Rs 25 what would happen to her consumption of food
?
Suppose sam gets a tax rebate of 25,000 to ease the affect of
the sales tax what would her consumption of food be now ?
Is she better off or worse off in terms of the food consumption
when given a rebate equal to the amount by which her food
consumption declined after the sales tax on the price of food ?