Ramsey Taxation ProblemSuppose there are two medical goods. Heart surgery and plastic (cosmetic) surgery. The market price for the heart surgery is $100k, the market price for plastic surgery is $10k. The price .com/economics/elasticity”>elasticity of demand for heart surgery is -0.2.
Ramsey Taxation ProblemSuppose there are two medical goods. Heart surgery and plastic (cosmetic) surgery. The market price for the heart surgery is $100k, the market price for plastic surgery is $10k. The price .com/economics/elasticity”>elasticity of demand for heart surgery is -0.2.
The price elasticity of demand for plastic surgery is -3.0. The government is considering a tax on the surgeries. The tax on heart surgery is denoted th, and the tax on plastic surgery is denoted tp.a) Why did I choose to make the demand elasticity for plastic surgery large relative to heart surgery?b) What is the equation for the optimal (Ramsey) value of th in terms of tp.c) In a clearly written paragraph, comment on the relative size of th compared to tp, and why we are seeing this result.d) Suppose the government has selected tax levels th and tp using the Ramsey rule. Furthermore, at those .com/economics/taxation”>taxes, the market sells 300 thousand heart surgeries and 1.5 million plastic surgeries. Finally, the government collects $1 billion in revenue from these taxes. What are the values of th and tp?Suppose there are two medical goods. Heart surgery and plastic (cosmetic) surgery. The market price for the heart surgery is $100k, the market price for plastic surgery is $10k. The price .com/economics/elasticity”>elasticity of demand for heart surgery is -0.2. The price elasticity of demand for plastic surgery is -3.0. The government is considering a tax on the surgeries. The tax on heart surgery is denoted th, and the tax on plastic surgery is denoted tp.a) Why did I choose to make the demand elasticity for plastic surgery large relative to heart surgery?b) What is the equation for the optimal (Ramsey) value of th in terms of tp.c) In a clearly written paragraph, comment on the relative size of th compared to tp, and why we are seeing this result.d) Suppose the government has selected tax levels th and tp using the Ramsey rule. Furthermore, at those .com/economics/taxation”>taxes, the market sells 300 thousand heart surgeries and 1.5 million plastic surgeries. Finally, the government collects $1 billion in revenue from these taxes. What are the values of th and tp?
Having Trouble Meeting Your Deadline?
Get your assignment on Ramsey Taxation ProblemSuppose there are two medical goods. Heart surgery and plastic (cosmetic) surgery. The market price for the heart surgery is $100k, the market price for plastic surgery is $10k. The price .com/economics/elasticity”>elasticity of demand for heart surgery is -0.2. completed on time. avoid delay and – ORDER NOW
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Order Now and we will direct you to our Order Page at Litessays. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.