Economics Homework Help
ECON 1012 York University Economics of Taxation Question
Task:
Utilise a tax within a demand and supply model for luxury cars, to analyse the Luxury
Car Tax described on this webpage. Although in reality it is a percentage-based tax
with even other complexities such as a threshold, as a simplification you can consider
it as a basic per-unit tax of a fixed amount (and do not need to follow the correct
numbers), to make it more similar to examples studies in our course.
The article says that the “tax is paid by dealers”. Explain why then it is not just the
dealers (sellers) who are impacted by the tax. Detail the impacts caused by this tax on
not just the dealers, but also on consumers, the government, and overall economic
efficiency.
Ensure that you use diagrams where relevant to support your answer, and make sure
to use key terminology and course concepts where appropriate.
