The State of Florida Is Considering Putting an Excise Tax

question 81

Essay

The state of Florida is considering putting an excise tax on either good X or good Y. An economist discovers the supply of good X is more elastic than the supply of good Y, while the demand elasticities are identical. Which good should Florida tax in order to minimize the deadweight loss of the tax?

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Definitions:

Social Processes

Patterns of interaction between individuals and groups that determine how societies are organized and how they function.

Olfactory Cilia

Microscopic hair-like structures located in the nasal cavity that are responsible for detecting odor molecules, playing a key role in the sense of smell.

Receptors

Proteins on or within cells that bind to specific molecules, leading to a cellular response.

Taste Buds

Small sensory organs located on the tongue, capable of detecting different tastes such as sweet, sour, bitter, and salty.