If the Government Is Most Interested in Minimising Excess Burden

question 8

Essay

If the government is most interested in minimising excess burden of an excise tax, should it impose the tax on goods that are elastic or on goods that are inelastic?

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Definitions:

Investors

Individuals or institutions that allocate capital with the expectation of receiving financial returns.

Indirect Expenses

Costs that are not directly traceable to a specific product or operation, such as utilities or administrative salaries.

Secondary Equity Offering

The issuance of new stock for sale to the public by a company that has already undergone an initial public offering (IPO).