Suppose That a Tax Is Imposed on the Log Market

question 102

Essay

Suppose that a tax is imposed on the log market to discourage deforestation. What would you predict about (a) the size of the deadweight loss of the tax in the short run relative to the long run, and (b) the amount of revenue collected from the tax in the short run relative to the long run? Explain why.

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Definitions:

Reasonable Pay

Compensation for employment that is fair and commensurate with the job responsibilities, skill level required, and market rates.

Incompetence

A lack of ability, skill, or qualifications to perform a task or duty to a required standard.

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The end of an employee's duration with an employer, which can be voluntary or involuntary.

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A formal communication or warning given in writing or verbally about something.