Author Question: A disadvantage of unit excise taxes is they create the incentive _____. a. for producers to favor ... (Read 23 times)

stock · **on:** Jul 1, 2018

A disadvantage of unit excise taxes is they create the incentive _____.

a. for producers to favor smaller products over larger products
b. for producers to favor expensive products over inexpensive products
c. for buyers to purchase more of the good then they otherwise would
d. for buyers to shift to substitute goods with ad valorem excise taxes

Question 2

Does education increase economic growth? Explain your answer.

What will be an ideal response?

Jody Vaughn · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

b

Answer to Question 2

Yes. While the relationship is not easily quantified, but there does seem to be a positive relationship between education and economic growth. At the same time, however, higher incomes (from economic growth) cause individuals to consume more education, so the causality runs both ways. This is why we see such a large correlation between education and economic growth in the aggregate.