John Has Been in the Habit of Mowing Willa's Lawn

question 104

Essay

John has been in the habit of mowing Willa's lawn each week for $20. John's opportunity cost is $15, and Willa would be willing to pay $25 to have her lawn mowed. What is the maximum tax the government can impose on lawn mowing without discouraging John and Willa from continuing their mutually beneficial arrangement?

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Definitions:

Fluid Ounce

A unit of volume used primarily in the United States to measure liquids, equivalent to approximately 29.57 ml.

Fl Oz

A unit of volume measurement equal to one fluid ounce, commonly used in the United States.

1/1,000,000

A mathematical fraction denoting one part per million (ppm), often used to measure concentration levels in chemistry and environmental science.