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:

Conservation

The understanding that certain properties of an object or substance remain the same even when its appearance changes, a concept grasped during the concrete operational stage in Piaget's theory of cognitive development.

Mass

A measure of the amount of matter in an object, fundamental in physics and chemistry for understanding the properties of substances.

Volume

The amount of space that a substance or object occupies, or that is enclosed within a container.

Cognitive Development

The process of growth and change in intellectual/mental abilities such as thinking, reasoning, and understanding over the course of a person's life.