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. Answer the following:
· What type of tax is this? describe.
· 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?