ECON 4624 - Mid-term assignment September 29, 2016 This exercise set consists of four (4) pages. 1 Practicalities As noted at the start of the course. Part (50%) of the exam will be a discussion of (some aspects) of one of the papers we lecture over in this course. This exercise is meant to provide an opportunity to try out an example of that part of the exam. The exam is only 3 hours, and the discussion of some part of a paper on the syllabus is only one halvf of the exam, so think hard about what are the key points, and how you can condense your discussion to get it “exam like”. In no case should you submit more than three pages of text, one-half spaced, 12 pt, Times New Roman (or similar), 2.5 cm margins. If you want to add illustrations, like graphs, you may add two pages for these (only the graphs with brief captions, no notes). Please hand in your paper in fronter by October 14. 2 Exercise Chetty, Looney and Kroft (2013, hereafter CLK) discuss how salience affects the incidence of taxation. 1. Briefly explain what determines the incidence of a sales tax in the basic model. 2. Table 4 from CLK is reproduced below. (a) Explain the main message of this table. 1