Homework Answers
(6) (D)
A subsidy is a negative tax, offered to increase production (or consumption).
(7) (C)
A consumption subsidy shifts demand curve rightward.
(8) (A)
To be effective, a price ceiling is imposed lower than equilibrium price.
(9) (D)
To be effective, a price floor is imposed higher than equilibrium price.
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oue A subsidy is a: a tax designed to encourage particular purchases or productive activities. form...
45. A negative externality or spillover cost occurs when A) firms fail to achieve productive efficiency...
45. A negative externality or spillover cost occurs when A) firms fail to achieve productive efficiency B) firms fail to achieve allocative efficiency the price of a good exceeds the marginal cost of producing it. the total cost of producing a good exceeds the costs borne by the producer. 46. s, Quantity Quantity Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Qo and that government purposely shifts the...
A subsidy is a benefit given by the government to groups or individuals, usually in the...
A subsidy is a benefit given by the government to groups or individuals, usually in the form of cash payment or tax reduction to encourage production. We can think of a subsidy as a “negative” tax. Suppose the government gives producers a specific subsidy of $4 per unit. (35 points) Using supply and demand curves, draw a diagram that clearly shows what happens when the specific $4 subsidy is implemented. What price do sellers receive and what do the consumers...
If the government imposes a tax on buyers as a way of reducing pollution, which curve...
If the government imposes a tax on buyers as a way of reducing pollution, which curve is affected and how? Select one: A. The supply curve shifts to the left. B. The demand curve shifts to the right. c. Neither the demand nor the supply curve is affected but the price will increase. D. The supply curve shifts to the right. E. The demand curve shifts to the left.
If we model a tax on the demand side, then the equilibrium price we reach will...
If we model a tax on the demand side, then the equilibrium price we reach will be higher than if we model the tax on suppliers. True False When we model a tax, the new equilibrium price represents the price paid by the buyers the revenue raised from the tax O the price the sellers keep O the amount of the tax Question 39 (1 point) Which of the following is not an appropriate way to model a tax? shifting...
1. In a competitive market, the quantity of a product produced and the price of the...
1. In a competitive market, the quantity of a product produced and the price of the product are determined by a. buyers. b. sellers. c. both buyers and sellers. d. None of the above is correct. 2. Which of the following statements is correct? a. Buyers determine supply and sellers determine demand. b. Buyers determine demand and sellers determine supply. c. Buyers determine both demand and supply d. Sellers determine both demand and supply 3. The demand for a good...
Economics, Tax
This question for my homework is really confusing me and I do not know how to answer it. Help would be appreciated. Suppose the current equilibrium price of cheese pizzas is $ 10.00, and 9 million pizzas are sold per month. After the federal government imposes a $ 3.00 per pizza tax, the equilibrium price of pizzas rises to $ 11.00, and the equilibrium quantity falls to 7 million. Compare the economic surplus in this market when there is no tax...
Figure 1. Price $ Supply (after tax) Supply (before tax) Demand 75 100 Quantity of Cigarettes 12. In Figure 1, the...
Figure 1. Price $ Supply (after tax) Supply (before tax) Demand 75 100 Quantity of Cigarettes 12. In Figure 1, the tax is being levied to the a. Third party b. Buyer c. Government d. None of the above curve is unchanged. 13. The curve shifts to the left after tax but a. Demand; supply b. Supply; demand c. Supply, supply d. Demand; demand 14. The amount of tax is a. $1 b. $3 c. $2 d. $4 15. The...
need by 11:59 will rate and thumbs up Concept: Subsidy Assume the figure to the right...
need by 11:59
will rate and thumbs up
Concept: Subsidy Assume the figure to the right illustrates the market for orange juice. Suppose the government begins providing orange juice producers a $0.60 per pound subsidy. What will be the effects of this subsidy on the market for orange juice? 1.) Using the point drawing tool, indicate the pre-subsidy competitive market equilibrium. Label this point 'e, 2.) Using the line drawing tool, draw a new supply curve reflecting the subsidy. Label...
please answer these. Thank you. 29. When a tax is placed on the buyers of coffee,...
please answer these. Thank you.
29. When a tax is placed on the buyers of coffee, the buyers bear the entire burden of the tax b. sellers bear the entire burden of the tax burden of the tax will be always be equally divided between the buyers and the sellers d. burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal 30. the government wants to reduce...
1.Positive analysis involves the formulation and testing of hypotheses. involves value judgments concerning the desirability of...
1.Positive analysis involves the formulation and testing of hypotheses. involves value judgments concerning the desirability of alternative outcomes. weighs the fairness of a policy. examines if the outcome is desirable. 2.Because a price ceiling causes a shortage, some form of rationing must occur. a surplus, some form of rationing must occur. a shortage, the outcome will be efficient. a surplus, the outcome will be inefficient. 3.For a price ceiling to have an impact on a market, it must be set...
45. A negative externality or spillover cost occurs when A) firms fail to achieve productive efficiency B) firms fail to achieve allocative efficiency the price of a good exceeds the marginal cost of producing it. the total cost of producing a good exceeds the costs borne by the producer. 46. s, Quantity Quantity Refer to the diagrams for two separate product markets. Assume that society's optimal level of output in each market is Qo and that government purposely shifts the...
If the government imposes a tax on buyers as a way of reducing pollution, which curve is affected and how? Select one: A. The supply curve shifts to the left. B. The demand curve shifts to the right. c. Neither the demand nor the supply curve is affected but the price will increase. D. The supply curve shifts to the right. E. The demand curve shifts to the left.
If we model a tax on the demand side, then the equilibrium price we reach will be higher than if we model the tax on suppliers. True False When we model a tax, the new equilibrium price represents the price paid by the buyers the revenue raised from the tax O the price the sellers keep O the amount of the tax Question 39 (1 point) Which of the following is not an appropriate way to model a tax? shifting...
1. In a competitive market, the quantity of a product produced and the price of the product are determined by a. buyers. b. sellers. c. both buyers and sellers. d. None of the above is correct. 2. Which of the following statements is correct? a. Buyers determine supply and sellers determine demand. b. Buyers determine demand and sellers determine supply. c. Buyers determine both demand and supply d. Sellers determine both demand and supply 3. The demand for a good...
Figure 1. Price $ Supply (after tax) Supply (before tax) Demand 75 100 Quantity of Cigarettes 12. In Figure 1, the tax is being levied to the a. Third party b. Buyer c. Government d. None of the above curve is unchanged. 13. The curve shifts to the left after tax but a. Demand; supply b. Supply; demand c. Supply, supply d. Demand; demand 14. The amount of tax is a. $1 b. $3 c. $2 d. $4 15. The...
need by 11:59
will rate and thumbs up
Concept: Subsidy Assume the figure to the right illustrates the market for orange juice. Suppose the government begins providing orange juice producers a $0.60 per pound subsidy. What will be the effects of this subsidy on the market for orange juice? 1.) Using the point drawing tool, indicate the pre-subsidy competitive market equilibrium. Label this point 'e, 2.) Using the line drawing tool, draw a new supply curve reflecting the subsidy. Label...
please answer these. Thank you.
29. When a tax is placed on the buyers of coffee, the buyers bear the entire burden of the tax b. sellers bear the entire burden of the tax burden of the tax will be always be equally divided between the buyers and the sellers d. burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal 30. the government wants to reduce...
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