The average retail price of the cookbook will be $30, and the average cost will be $20. Assume that the equation for demand is Q = 10,000 - 9,000P, where Q = the number of cookbooks sold per month P = the retail price of books. Show what the demand curve would look like if you sold the books between $25 and $35. The government decides to tax cookbooks because they feel that they encourage overeating and can lead to health issues, such as obesity and heart disease.

•What type of tax is this? Explain.

•What happens to the supply of cookbooks?

•What happens to the equilibrium price?

•Who pays the tax at the end?

•Is this a good way to finance programs to improve health?

•What other types of tax can the government use to increase revenues?

•Does this reflect an absolute or a comparative advantage?

•Name 4 issues that you will encounter as you become a multinational corporation.

•What happens to your marginal utility as you buy your third luxury automobile? Why?