Homework Answers
Option (b).
Unless demand or supply curve are perfectly elastic or perfectly inelastic, imposition of tax makes the tax burden shared by consumers and producers. Relative tax burden depends on relative elasticities of demand and supply.
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Text questions A tax is imposed per kg. of sugar that consumers buy. Which of the...
Which of the following tax collection claims is incorrect? Choose one: a. The loss of welfare...
Which of the following tax collection claims is incorrect? Choose one: a. The loss of welfare tax is less as the tax is lower in ISK or proportion. b. A tax imposed on a person who has a completely unsustainable price elasticity of demand does not result in any loss of welfare. C. Taxation entails a loss of welfare (deadweight loss, all loss). d. The tax itself is part of the cost of the tax system. e. Efficient taxes never...
11. The goals of optimal income taxation include all of the following EXCEPT: a. maximizing tax...
11. The goals of optimal income taxation include all of the following EXCEPT: a. maximizing tax revenue. b. minimizing the distortions due to taxation. c. maximizing the nation's social welfare function. d. achieving vertical equity. 12. Suppose that the elasticities of demand for apples, bananas, and peaches are –0.9, –1.6, and –0.8, respectively. Assume that all else is identical in these three products and that an identical tax is levied on each good. Rank the products from highest to lowest...
GingerSnap Cookies sell for $40 per box, of which $10 consists of tax, and 600,000 boxes...
GingerSnap Cookies sell for $40 per box, of which $10 consists of tax, and 600,000 boxes are sold every year. From previous research, you know that the price elasticity of demand for GingerSnap Cookies is –2.2 (that is 2.2 in absolute value terms). Choco cookies sell for $30 per box (which includes $l0 tax), and 800,000 boxes of Choco cookies are sold every year. The cross-price elasticity of demand for Choco cookies, with respect to a change in the price...
1- Consider a monopolistic market where the government has decided to implement lump-sum tax. Which of...
1- Consider a monopolistic market where the government has decided to implement lump-sum tax. Which of the following are true? Select all that apply. The monopolist loses profit. The government gains revenue. The monopolist is forced to reduce their prices. The monopolist is forced to sell less products. 2-Consider a monopolistic market where the government has decided to implement lump-sum tax. Which of the following are true? Select all that apply. The monopolist loses profit. The government gains revenue. The...
I have bolded the questions that I believe to be correct. Which of the following is...
I have bolded the questions that I believe to be correct. Which of the following is an example of price discrimination? a. Seniors paying a lower price for tickets at movie theatres b. Students paying discounted rates on travel c. Tourists paying higher prices on local attractions than locals d. All of the above Amusement parks often offer discounts to locals with IDs. This is an example of a. A direct discrimination scheme ...
QUESTION 21 Assume there is a price floor imposed on a good which is above the...
QUESTION 21 Assume there is a price floor imposed on a good which is above the equilibrium price. Which of the following changes would reduce the size of the surplus? a. An increase in demand. b. A decrease in demand. c. An increase in supply. d. Any of the above. QUESTION 22 Economic growth can be illustrated by: a. an inward shift of the production possibilities curve. b. a movement along the production possibilities curve. a movement from a point...
ASSIGNMENT 1: Case Study Topic: Sugar refiners say there is no monopoly in Malaysia KUALA LUMPUR:...
ASSIGNMENT 1: Case Study Topic: Sugar refiners say there is no monopoly in Malaysia KUALA LUMPUR: MSM Malaysia Holdings Bhd (MSM) and Central Sugars Refinery Sdn Bhd (CSR) has reaffirmed that there is no sugar monopoly in Malaysia amid claims by certain parties. The two sole sugar refiners said as sugar is gazetted under the Price Control and Anti-Profiteering Act 2011, sugar price in Malaysia is amongst the cheapest in the world. Currently, the ceiling price for coarse grain sugar...
19. Ifthe price ofoil (a close substitute for coal) increases, then the a. supply curve for...
19. Ifthe price ofoil (a close substitute for coal) increases, then the a. supply curve for coal will shift to the right. b. demand curve for coal will shift to the tight. C. equilibrium price and quantity of coal will not change. d. quantity of coal demanded will decline. 20. If the rice of shoes is initially above the equilibrium value, which of the following is likely to occur? a. stores inventories will decrease as consumers buy more shoe than...
(67)Suppose that when the price of cherries is $10 per lb, the quantity supplied of cherries...
(67)Suppose that when the price of cherries is $10 per lb, the quantity supplied of cherries is 20 lbs. When price of cherries is $6 per lb, the quantity supplied of cherries is 12 lbs. The price elasticity of supply is: (a)1.7 (b)1.0 (c)2.5 (d)0.8 (68)If an excise tax is placed on the producer of a product that has a perfectly inelastic demand, given ceteris paribus then: (a)The entire tax will be paid by the producer (b)The consumer and producer...
Which of the following tax collection claims is incorrect? Choose one: a. The loss of welfare tax is less as the tax is lower in ISK or proportion. b. A tax imposed on a person who has a completely unsustainable price elasticity of demand does not result in any loss of welfare. C. Taxation entails a loss of welfare (deadweight loss, all loss). d. The tax itself is part of the cost of the tax system. e. Efficient taxes never...
QUESTION 21 Assume there is a price floor imposed on a good which is above the equilibrium price. Which of the following changes would reduce the size of the surplus? a. An increase in demand. b. A decrease in demand. c. An increase in supply. d. Any of the above. QUESTION 22 Economic growth can be illustrated by: a. an inward shift of the production possibilities curve. b. a movement along the production possibilities curve. a movement from a point...
ASSIGNMENT 1: Case Study Topic: Sugar refiners say there is no monopoly in Malaysia KUALA LUMPUR: MSM Malaysia Holdings Bhd (MSM) and Central Sugars Refinery Sdn Bhd (CSR) has reaffirmed that there is no sugar monopoly in Malaysia amid claims by certain parties. The two sole sugar refiners said as sugar is gazetted under the Price Control and Anti-Profiteering Act 2011, sugar price in Malaysia is amongst the cheapest in the world. Currently, the ceiling price for coarse grain sugar...
19. Ifthe price ofoil (a close substitute for coal) increases, then the a. supply curve for coal will shift to the right. b. demand curve for coal will shift to the tight. C. equilibrium price and quantity of coal will not change. d. quantity of coal demanded will decline. 20. If the rice of shoes is initially above the equilibrium value, which of the following is likely to occur? a. stores inventories will decrease as consumers buy more shoe than...
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