Suppose that the government taxed consumption

1. Suppose that the government taxed consumption.To be specific, suppose we have a two-period model. An individual earns labor income Y0 =$100k at time zero, and earns no labor income at time 1. The individual may consume or save that income. Savings grow at rate...

Consider a production function of two inputs

Consider a production function of two inputs, labor and capital, given by Q=( L^1/2+ k^1/2 )^2 The marginal products associated with this production function are as follows:MPL=[L^1/2+K^1/2]*L^(-1/2)MPK=[L^1/2+ K^1/2]*k^(-1/2)Let w =2 and r = 1.a) Suppose the firm is...

Suppose the state government imposes a new 20 cent tax

DUE: Wednesday September 7, 2016Homework 1.5(13 points)1.(5 points) Suppose the state government imposes a new 20 cent tax per 12 ounce can of sodaor equivalent sold in retail outlets.a.What impact would this have on consumer surplus from soda consumption?b.What...