Homework Answers
We know that the tax revenue collected by the government
after imposition of tax is = tax rate* change in quantity. Now in
case of small tax, tax rate is very small and hence tax revenue
also is very small and deadweight loss is small as well. Now in
case of Medium tax, tax rate is comparatively higher and tax
revenue is also higher compared to the small tax case and
deadweight loss is also higher. Now in case of large tax, tax rate
is so high that consumers are unable to buy the good and hence
quantity consumed declines by a large amount and hence tax revenue
becomes smaller and market distortion or deadweight loss becomes
larger.
Hence the answer will be:
The size of the deadweight loss increases, but the tax
revenue first increases, then decreases.
Market power and externalities are examples of market failure as the forces of supply and demand cannot operate the market efficiently. Hence the answer will be:
Market failure.
Free market allocations are desirable when the sum of consumer and producer surplus or when total surplus is maximised. The market is efficient and desirable when there is no lost surplus or deadweight loss in the economy. Hence the answer will be:
Consumer and producer surplus.
Allocation of resources is efficient when the sum of consumer and producer surplus is maximised or when total surplus in the economy is maximised and when there is no lost surplus or welfare loss in the economy. Hence the answer will be:
total surplus is maximized.
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Which of the following statements correctly describes the relationship between the size of the deadweight loss...
Click on the icon to read the news dip, then answer the following questions Price bollars...
Click on the icon to read the news dip, then answer the following questions Price bollars per gallon) The graph shows the market for milk in Venezuela when a price control is in effect Draw a shape that represents: 1) consumer surplus Labelit CS 2) producer surplus, Labelit PS, 3) the deadweight loss. Label DWL. Also draw a shape that show the resources lost from time spend in line Labelit Loss Moving from a milk market with no price controls...
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...
Figure 8-23. The figure represents the relationship between the size of a tax and the tax...
Figure 8-23. The figure represents the relationship between the size of a tax and the tax revenue raised by that tax. Tax Revenue - Nwao Tax Size Refer to Figure 8-23. If the economy is at point A on the curve, then a decrease in the tax rate will increase the deadweight loss of the tax and increase tax revenue. increase the deadweight loss of the tax and decrease tax revenue. decrease the deadweight loss of the tax and decrease...
tax on a good has a deadweight loss if O the reduction in consumer and producer...
tax on a good has a deadweight loss if O the reduction in consumer and producer surplus is greater than the tax revenue. the tax revenue is greater than the reduction in consumer and producer surplus. O the reduction in consumer surplus is greater than the reduction in producer surplus the reduction in producer surplus is greater than the reduction in consumer surplus. CENGAGE MINDTAP Direct-from-Text Homework: Applications: The Costs of Taxation Back to Assignment Attempts: Score: /1 2. Multiple...
1. The services of real estate brokers are provided in a competitive market. If the Oregon...
1. The services of real estate brokers are provided in a competitive market. If the Oregon Association of Realtors enacts new requirements that limit the number of real estate brokers, which of the following is most likely to occur? A) Producer surplus will increase. B) Entry of new brokers will increase. C) Consumer surplus will increase. D) Social welfare will increase. 2. Which of the following best describes the market reaction if the Oregon Liquor Control Commission restricts the number...
NAME PRINT LAST NAME, FIRST NAME SECTION Commodity taxes usually result in deadweight loss because a...
NAME PRINT LAST NAME, FIRST NAME SECTION Commodity taxes usually result in deadweight loss because a tax saus fall, increasing both consumer surplus and producer Surplus fall, decreasing both consumer surplus and producer surplus rise, increasing both consumer surplus and producer surplus rise, decreasing both consumer surplus and producer surplus Use the graph below to answer questions 6 through 10. Price 8.50 Supply + Tas 6.50 5.50 4.50 - Supply 3.50 Demand 750 1,500 Quantity If there is no tax...
Deadweight loss is the loss in the total surplus due to some buyers and sellers leaving...
Deadweight loss is the loss in the total surplus due to some buyers and sellers leaving the market. When tax causes deadweight loss then why it is imposed in the first place? Who gains in this situation? Also if tax has to be imposed how to determine what size of tax will generate optimum tax revenue for the government?
Drag the words into the correct boxes. drag the Drag the words into the correct boxes...
Drag the words into the correct boxes.
drag the
Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will equal and Marginal will equal Costs. This also occurs when there is no Loss. Net Benefits are all captured when the sum of Consumer and Surplus is maximised and there is no under or production or Price ceilings set equilibrium are said to be binding. This is because the market results in...
at a Drag the words into the correct boxes Market occurs when all Net have been...
at a Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will Supply equal and Marginal will equal Costs. This also occurs efficiency when there is no Loss before Net Benefits are all captured when the sum of Consumer and Surplus is greater maximised and there is no under or production or produces Price ceilings set equilibrium are said to be binding. This is because the market results in a where...
Drag the words into the correct boxes Market occurs when all Net have been captured. This...
Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will equal and Marginal will equal Costs. This also occurs when there is no Loss. Net Benefits are all captured when the sum of Consumer and Surplus is maximised and there is no under or production or Price ceilings set equilibrium are said to be binding. This is because the market results in a where quantity demanded is than quantity supplied Price...
Click on the icon to read the news dip, then answer the following questions Price bollars per gallon) The graph shows the market for milk in Venezuela when a price control is in effect Draw a shape that represents: 1) consumer surplus Labelit CS 2) producer surplus, Labelit PS, 3) the deadweight loss. Label DWL. Also draw a shape that show the resources lost from time spend in line Labelit Loss Moving from a milk market with no price controls...
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...
Figure 8-23. The figure represents the relationship between the size of a tax and the tax revenue raised by that tax. Tax Revenue - Nwao Tax Size Refer to Figure 8-23. If the economy is at point A on the curve, then a decrease in the tax rate will increase the deadweight loss of the tax and increase tax revenue. increase the deadweight loss of the tax and decrease tax revenue. decrease the deadweight loss of the tax and decrease...
tax on a good has a deadweight loss if O the reduction in consumer and producer surplus is greater than the tax revenue. the tax revenue is greater than the reduction in consumer and producer surplus. O the reduction in consumer surplus is greater than the reduction in producer surplus the reduction in producer surplus is greater than the reduction in consumer surplus. CENGAGE MINDTAP Direct-from-Text Homework: Applications: The Costs of Taxation Back to Assignment Attempts: Score: /1 2. Multiple...
NAME PRINT LAST NAME, FIRST NAME SECTION Commodity taxes usually result in deadweight loss because a tax saus fall, increasing both consumer surplus and producer Surplus fall, decreasing both consumer surplus and producer surplus rise, increasing both consumer surplus and producer surplus rise, decreasing both consumer surplus and producer surplus Use the graph below to answer questions 6 through 10. Price 8.50 Supply + Tas 6.50 5.50 4.50 - Supply 3.50 Demand 750 1,500 Quantity If there is no tax...
Drag the words into the correct boxes.
drag the
Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will equal and Marginal will equal Costs. This also occurs when there is no Loss. Net Benefits are all captured when the sum of Consumer and Surplus is maximised and there is no under or production or Price ceilings set equilibrium are said to be binding. This is because the market results in...
at a Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will Supply equal and Marginal will equal Costs. This also occurs efficiency when there is no Loss before Net Benefits are all captured when the sum of Consumer and Surplus is greater maximised and there is no under or production or produces Price ceilings set equilibrium are said to be binding. This is because the market results in a where...
Drag the words into the correct boxes Market occurs when all Net have been captured. This means Demand will equal and Marginal will equal Costs. This also occurs when there is no Loss. Net Benefits are all captured when the sum of Consumer and Surplus is maximised and there is no under or production or Price ceilings set equilibrium are said to be binding. This is because the market results in a where quantity demanded is than quantity supplied Price...
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