Answer to Question #136150 in Microeconomics for Kevin Lu

Question

Say the City of Chicago is considering between two different excise taxes as a way to increase City revenue: an excise tax on gasoline sold in the City, or an excise tax on second (vacation) homes. Which of these two taxes is probably going to have a more negative impact on the City's economy?


both taxes will increase quantity sold

the tax on gasoline

the tax on second homes

both taxes will have the same effect

Answer 1

The tax on second homes