ECON 203 Lecture Notes - Lecture 5: Lump Sum, Internetwork Packet Exchange, International Polar Year
Document Summary
Excise tax and lump sum sb 1- graph 18. When figuring out the budget line, the line goes from i/py to i/px. 3 / 6. 33 = 0. 476 0. 25 = 0. 226 tax rate. 3 / 4. 92 = 0. 609 0. 25 = 0. 36 tax rate. 3 / 3 = 1 0. 25 = 0. 75 tax rate maximizes the amount of tax to be collected. Where is the vertical distance between the original budget line and the pc line = 3 the greatest? (1. 5, 1. 5) where we collect the most taxes. T = 0. 75 this is where the maximum amount of tax is collected. We would collect . 125 in taxes because they buy 1. 5 units and are charged a 75% tax rate. Collect the most tax revenue at the point of greatest distance between original budget line and pc line. 3 / 4. 9 = 0. 612 0. 25 = 0. 362 tax rate.
