Homework Answers
(8) (a)
A perfectly inelastic (vertical) supply curve (for a good with fixed supply, like land) means that if tax is imposed on it, entire tax burden is borne by the sellers (landlords) and a huge deadweight loss is generated.
(9) (c)
At downward sloping portion of Laffer curve, an increase in tax rate decreases tax revenue and increases deadweight loss, while a decrease in tax rate increases tax revenue and decreases deadweight loss.
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58. A tax placed on land (fixed) would cause a. a huge deadweight loss. b. no...
Complete the following table with the tax revenue collected and deadweight loss caused by each of the tax proposals.
3. Relationship between tax revenues, deadweight loss, and demand elasticityThe government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by DC (on the first graph), and the demand for bus passes is shown by DB (on the second graph).Suppose the government taxes...
Homework (Ch 08) 3. Relationship between tax revenues, deadweight loss, and demandelasticity The government is considering...
Homework (Ch 08) 3. Relationship between tax revenues, deadweight loss, and demandelasticity The government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by Dc (on the first graph), and the demand for bus passes is shown by Ds (on the second graph)....
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...
QUESTION 6 The deadweight loss associated with a per-unit tax will be small relative to the...
QUESTION 6 The deadweight loss associated with a per-unit tax will be small relative to the tax revenue collected if: supply and demand are both elastic. O A. supply and demand are both inelastic. OB. supply is elastic, demand is inelastic. OC demand is elastic, supply is inelastic. OD. QUESTION 7 Consider the following statements when answering this question 1. It is not possible to help consumers by simply shifting taxes from consumers paying them to producers paying them. II....
I need help with these Mcq's please. Thank you 37. Efficiency in a market is achieved...
I need help with these Mcq's please. Thank you
37. Efficiency in a market is achieved when cial planner intervenes and sets the quantity of output after evaluating buyers willingness to pay and sellers' costs the sum of producer surplus and consumer surplus is maximized all firms are producing the end at the same low cost per unit. no buyer is willing to pay more than the equilibrium price for any unit of the good. C ( 38. Total surplus...
I need help solving this Asap. thanks alot. Figure 1: Supply and Demand in the Market...
I need help solving this Asap. thanks alot.
Figure 1: Supply and Demand in the Market for a Good Price ($/unit) 35 27 Supply 23 19 15 13 11 9 Demand 5 13 17 Quantity (units) 11 12 10 8 6 14. Refer to Figure 1. At the market equilibrium, total consumer surplus is $10 b. $50 а. $100 d. $200 15. Refer to Figure 1. Holding the supply curve fixed, assume demand increased, which caused the equilibrium price to...
ABC Tax is evaluating the profitability of their two customers, A and B. Total fixed costs...
ABC Tax is evaluating the profitability of their two customers, A and B. Total fixed costs are allocated evenly between customer A and B, and will remain the same whether they add or drop customers. Should ABC Tax drop customer B? The profit/loss for each customer is shown below. Should customer B be dropped? A B Revenue 250,000 140,000 Variable costs 112500 63000 Contribution margin 137,500 77,000 Allocated fixed costs 80000 80000 Customer profit (loss) 57,500 -3,000 No, profit will...
15. {Refer to Figure 4 above). In the market shown, tax revenue is: A. $80 B. $200 C. $100 D. $50 16. When s...
15. {Refer to Figure 4 above). In the market shown, tax revenue is: A. $80 B. $200 C. $100 D. $50 16. When supply and demand both become more inelastic, deadweight loss tends to: A. Decrease B. Increase 17. When supply and demand both become more inelastic, tax revenue tends to: A. Decrease B. Increase 18. Jacquelyn is a student at a major state university. Which of the following is not an example of an explicit cost of her attending...
riod's output will cause future periods' long-run average cost curves to be lower 12 Learning by doing doctrine sug...
riod's output will cause future periods' long-run average cost curves to be lower 12 Learning by doing doctrine suggests that: MC shifts upward as current output increases b. an increase in this period's output long-run average cost curve to increase at a smaller output d the Law of Diminishing Returns to be violated e, none of the above 13. If given quantities of soap and sham be produced separately then: both production processes must be characterized by economies of scale...
1) Specific tariffs are a) import taxes stated in specific legal statutes b) import taxes calculated...
1) Specific tariffs are a) import taxes stated in specific legal statutes b) import taxes calculated as a fixed charge for each unit of imported goods c) import taxes calculated as a fraction of the value of the imported goods d) import taxes calculated based on the origin country 2) Ad valorem tariffs are a) import taxes stated in advertisements in industry publications b) import taxes calculated as a fixed charge for each unit of imported goods c) import taxes...
Homework (Ch 08) 3. Relationship between tax revenues, deadweight loss, and demandelasticity The government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by Dc (on the first graph), and the demand for bus passes is shown by Ds (on the second graph)....
QUESTION 6 The deadweight loss associated with a per-unit tax will be small relative to the tax revenue collected if: supply and demand are both elastic. O A. supply and demand are both inelastic. OB. supply is elastic, demand is inelastic. OC demand is elastic, supply is inelastic. OD. QUESTION 7 Consider the following statements when answering this question 1. It is not possible to help consumers by simply shifting taxes from consumers paying them to producers paying them. II....
I need help with these Mcq's please. Thank you
37. Efficiency in a market is achieved when cial planner intervenes and sets the quantity of output after evaluating buyers willingness to pay and sellers' costs the sum of producer surplus and consumer surplus is maximized all firms are producing the end at the same low cost per unit. no buyer is willing to pay more than the equilibrium price for any unit of the good. C ( 38. Total surplus...
I need help solving this Asap. thanks alot.
Figure 1: Supply and Demand in the Market for a Good Price ($/unit) 35 27 Supply 23 19 15 13 11 9 Demand 5 13 17 Quantity (units) 11 12 10 8 6 14. Refer to Figure 1. At the market equilibrium, total consumer surplus is $10 b. $50 а. $100 d. $200 15. Refer to Figure 1. Holding the supply curve fixed, assume demand increased, which caused the equilibrium price to...
15. {Refer to Figure 4 above). In the market shown, tax revenue is: A. $80 B. $200 C. $100 D. $50 16. When supply and demand both become more inelastic, deadweight loss tends to: A. Decrease B. Increase 17. When supply and demand both become more inelastic, tax revenue tends to: A. Decrease B. Increase 18. Jacquelyn is a student at a major state university. Which of the following is not an example of an explicit cost of her attending...
riod's output will cause future periods' long-run average cost curves to be lower 12 Learning by doing doctrine suggests that: MC shifts upward as current output increases b. an increase in this period's output long-run average cost curve to increase at a smaller output d the Law of Diminishing Returns to be violated e, none of the above 13. If given quantities of soap and sham be produced separately then: both production processes must be characterized by economies of scale...
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