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Question: suppose the federal government levies a 10cent sales tax on...

Question details

Suppose the federal government levies a 10cent sales tax on gasoline and an economist observes that ceteris paribus consumption of gasoline in Canada does not change at all after the tax is imposed.

  1. What type of good is gasoline? Illustrate and prove
  2. Why do governments frequently levy taxes on goods such as gasoline? Illustrate
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