Hi i need your help, i have a small fun assignment/project in our intro to econo

Question

Hi i need your help, i have a small fun assignment/project in our intro to economics class, the project is basically about about in a state of minnesota which has a minimum wage of 7.87$, what if we can help people by taking taxes(minnesota tax on food from 6.875% to 8.375%) on prepared food such as deli, restaurants, fast food nations other than increasing minimum wage? I just need a little help if you can explain and give me the advantages such as (workabiity, cost, desirability, disadvantages) on this plan and how this plan can work ?

Explanation / Answer

The idea of increase the taxes on food is good as the money that we get as tax on food can be spent on people who are below poverty line. People who go to the restaurant will pay taxes from their earnings this the only advantage.

Increase in taxes on food will have more negative effects on rather than positive effects as due to increase in taxes price also increases which means people will have to pay more money. If price increase obviously demand for product always decrease as they both have an inverse relationship with each other. If the demand decrease the supply will decrease which results in loss. Thus it will have a very bad effect on the restaurant and other fast food centre.

It will be alwsal better to increase the minimum wage rather than increase the taxes.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.