Consider the Cobb-Douglas utility function Suppose that a poll tax T = Ti for all i is levied on each of N members of society. Tax revenues are used to finance a public good G. a. Show that the majority voting outcome involves the amount of public good G = αNYm, where Ym denotes the before-tax income of the median voter. b. Now suppose that a proportional income tax Ti = tYi is levied. Show that the majority voting outcome involves the amount of public good is the mean income level. c. When income is uniformly distributed, which outcome is closest to the ancient outcome?

The Principles of Taxation Taxation systems are centered around two basic ideas. One is that people that benefit from services provided by tax revenues should be the ones who pay for them. Secondly, taxes should be paid in proportion to the number of benefits or services that an individual receives. Three Types of Taxes Taxes can be proportional, progressive, or regressive in nature. A proportional tax is equal in that it sets the same percentage of income taxation on everyone regardless of income. So for individuals, as their income rises or falls, they pay the same percentage in tax. A progressive tax imposes a higher percentage rate of taxation as incomes go up. So as people make more money they pay a higher percentage of that income in tax, and the percentage goes down if their income goes down. Regressive taxes are the opposite of progressive. They impose a higher percentage of taxes on lower incomes than on higher incomes. Often these taxes are not income taxes, but other types…

Please no written by hand "No voting system is perfect." What does it mean by economist K. Arrow? Give a brief account on Condorcet Voting Paradox. A public school district is voting on the school budget and the resulting student-teacher ratio. A poll finds that 20 percent of the voters want a ratio of 9:1, 25 percent want a ratio of 10:1, 15 percent want a ratio of 11:1, and 40 percent want a ratio of 12:1. What outcome would you expect the district to

i. The elasticity of demand for beer in country A is 1.8 and the elasticity of demand for beer in country B is 1.7. Suppose that the supply of beer is the same in both countries and that both countries impose the same level of tax on beer. Does the consumer in country A share more burden of tax? Suppose the demand curve for sugar is Q = 60-3P and the supply curve is Q=2P. Suppose the government announces a per-unit tax of 1 on the price of sugar. What is the deadweight loss from the tax? Why do you think a policymaker and a consumer might interpret this deadweight loss differently?