Please tell me why the answer is what it is
The size of the deadweight loss resulting from a tax is smaller when which of the following is true? (a) the larger the price elasticity of demand (b) the smaller the price elasticity of supply (c) the larger the amount of the tax (d) none of the above are correct
Dead weight loss is nothing but decline in the traded goods due to an increase in the price of the goods due to taxes. This will be less in case of a smaller price elasticity of supply because then the supply curve will be close to vertical and deadweight loss will be only loss in the demand and not much loss in the supply as all the extra price increased due to an increase in the tax will be transferred to the consumer. the answer is "B".
Please tell me why the answer is what it is The size of the deadweight loss...
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...
One of the following would not to lead to a deadweight loss. Which one? a. A tax imposed on sellers when demand is downward sloping and supply is perfectly elastic b. A price ceiling that is set below the equilibrium price c. A subsidy paid to sellers when both demand and supply are elastic, but not infinite d. A tax imposed on sellers when demand is perfectly inelastic e. All the above will result to a deadweight loss
How do the elasticities of supply and demand affect the deadweight loss of a tax? Why do they have this effect? Please give examples and support your answer with concepts from the textbook.
Please rank the follow curves as to how they would contribute to deadweight loss if a good that had this elasticity was taxed. Assume the supply curve has an elasticity equal to 1. Most deadweigh loss least deadweigh loss 1.a demand curve with price elastisity of demand equal to 100 2. a demand curve with price elastisity of demand equal to 0.4 3. a demand curve that is perfectly inelastic 4. a demand curve that is unit elastic
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...
Which of the following statements correctly describes the relationship between the size of the deadweight loss and the amount of tax revenue as the size of a tax increases from a small tax to a medium tax and finally to a large tax? The size of the deadweight loss increases, but the tax revenue first increases, then decreases. Both the size of the deadweight loss and tax revenue increase. The size of the deadweight loss increases, but the tax revenue...
DWL = deadweight loss Suppose the elasticity of supply of cigarettes is 10. 1) Find estimates of the elasticity of demand for cigarettes, the current tax rate on cigarettes, average price, and annual quantity sold in Florida. Provide your sources. 2) How high would the price, including the tax, need to be to cut consumption by half? 3) How high would the tax have to be to push the after tax price that high? 4) Estimate the consumer and producer...
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)....
SSC 3383 Deadweight Loss WS1-M2 The following TWO questions refer to the supply and demand eurves illustrated below. Price Pa QQ2 Q3 Quantity 1. A price ceiling of P3 causes: a) A deadweight loss triangle whose corners are ABC. b) A deadweight loss triangle whose corners are ACD. c) A deadweight loss triangle whose corners are BEC. d) A deadweight loss triangle whose corners are CDE. 2. A price floor of P1 causes: a) Excess demand equal to the distance...
rice P4 Supply H D F G Demand Quantity 02 29. Refer to Figure 7-23 The figure depicts a market equilibrium where there is a tax on the good transacted. The deadweight loss as a result of the tax is represented by the area of a. A+B+D+F. b. C+H. c. B+D d. G+I Figure 8-16 Price Panel (b) Price Pasel (a) Sepply Dand Dand 1 2 34 5 67 Deantity 4 567 Denti- 1 2 30. Refer to Figure 8-16....