Homework Answers
The statement that “When a tax is imposed on the sale of a good, the seller will raise the price of the good by the amount of the tax, and the tax will be paid entirely by the consumer,”is False. This is because, the burden of a specific tax that will be borne by the consumer depends on the price elasticity of supply, given the market demand. Till the time the supply curve has a positive slope, a tax will be paid partly by the consumer and partly by the seller. Only in the case of a supply curve with infinite elasticity, will the entire burden of the tax be borne by the consumer.
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When a tax is imposed on the sale of a good, the seller will raise the...
A tax imposed on the sellers of a good will a. raise both the price buyers...
A tax imposed on the sellers of a good will a. raise both the price buyers pay and the effective price sellers receive. b. raise the price buyers pay and lower the effective price sellers receive. c. lower the price buyers pay and raise the effective price sellers receive. d. lower both the price buyers pay and the effective price sellers receive. Part B. When studying how some event or policy affects a market, elasticity provides information on the a....
ts) Suppose a tax is imposed on a good. This will A. increase the price paid by the buyer and decrease the price receiv...
ts) Suppose a tax is imposed on a good. This will A. increase the price paid by the buyer and decrease the price received by the seller B. increase the price paid by the buyer but leave the price received by the seller unchanged C. decrease the price received by the seller but leave the price received by the buyer unchanged D. increase the price received by the seller and decrease the price paid by the buyer
Question 15 (2.5 points) A sales tax imposed on sellers shifts the supply curve leftward for...
Question 15 (2.5 points) A sales tax imposed on sellers shifts the supply curve leftward for the taxed good because the A) tax is actually shifted entirely onto the buyer who can afford only a smaller supply. B) tax is paid by the seller to the government and is, therefore, like a cost of production. OC) higher price causes entry into the market. OD) tax shifts the demand curve leftward.
2) A. Graphically illustrate a per unit tax imposed on the seller of a product. Identify...
2) A. Graphically illustrate a per unit tax imposed on the seller of a product. Identify the welfare loss and the portion of the tax paid by the buyer and the seller. B. Explain how the elasticities of demand and supply affect the portion of the tax shifted onto the buyer and sellers respectively
Problem la: What is the effect of a $4 unit tax imposed on the seller? Problem...
Problem la: What is the effect of a $4 unit tax imposed on the seller? Problem 16: What is the effect of a $4 unit tax imposed on the buyer? 2n 1 Price 1 Price 2 4 6 8 10 12 14 16 Duantity 2 4 6 8 10 12 14 16 puantity Use the graph above to answer the questions: Use the graph above to answer the questions: i. Show on the graph what curve would shift asi. Show...
Suppose a $3 per-unit tax is imposed on the sellers of this good. 1) What is...
Suppose a $3 per-unit tax is imposed on the sellers of this
good.
1) What is the effective price that sellers will receive for the
good after the tax is imposed?
2) What price will buyers pay for the good after the tax is
imposed?
3)How much is the burden of this tax on the buyers/sellers in
this market?
How do you calculate it? Please explain.
Price 20 18 16 14 12 10 8 6 4 D 10 12 14...
In an effort to raise revenue without hurting lower income persons, Congress imposed an excise tax...
In an effort to raise revenue without hurting lower income
persons, Congress imposed an excise tax on luxury goods (viz.,
expensive cars, large yachts, furs, personal aircraft) manufactured
in the U.S. The excise tax imposed is represented on the diagram
below as Stax . The revenue government
anticipated it yielding is represented by the rectangle
P1abc (which is the tax per unit, distance ab, times
quantity Q1). The tax, however, did not work as
intended. After awhile domestic producers of...
When the government decides to impose a tax on sellers of a good or service, sellers...
When the government decides to impose a tax on sellers of a good or service, sellers try to pass the tax on to consumers by raising the price of the good being sold. Assume the government decides to place a $1 tax on each unit of a good sold, e.g., tires. Using the simple model of supply and demand, describe what would happen to the price and quantity of tires sold. Would the amount of tax paid by the consumer...
1. An excise tax (sales tax) is imposed on producers of a good. For a given...
1. An excise tax (sales tax) is imposed on producers of a good. For a given supply curve, the more price elastic the demand for the product, the greater the tax incidence on (the party that pays more portion of tax): Producers Both Consumers Neither
Refer to Figure 1. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market
QUESTION #1 Refer to Figure 1. Suppose a $3 per-unit tax is
imposed on the sellers of this good. How much is the burden of this
tax on the buyers in this market? What price will buyers pay for
the good after the tax is imposed? Explain clearly.QUESTION #2 Refer to Figure 1. Suppose a $3 per-unit tax is
imposed on the sellers of this good. How much is the burden of this
tax on the sellers in this market? What is...
ts) Suppose a tax is imposed on a good. This will A. increase the price paid by the buyer and decrease the price received by the seller B. increase the price paid by the buyer but leave the price received by the seller unchanged C. decrease the price received by the seller but leave the price received by the buyer unchanged D. increase the price received by the seller and decrease the price paid by the buyer
Question 15 (2.5 points) A sales tax imposed on sellers shifts the supply curve leftward for the taxed good because the A) tax is actually shifted entirely onto the buyer who can afford only a smaller supply. B) tax is paid by the seller to the government and is, therefore, like a cost of production. OC) higher price causes entry into the market. OD) tax shifts the demand curve leftward.
2) A. Graphically illustrate a per unit tax imposed on the seller of a product. Identify the welfare loss and the portion of the tax paid by the buyer and the seller. B. Explain how the elasticities of demand and supply affect the portion of the tax shifted onto the buyer and sellers respectively
Problem la: What is the effect of a $4 unit tax imposed on the seller? Problem 16: What is the effect of a $4 unit tax imposed on the buyer? 2n 1 Price 1 Price 2 4 6 8 10 12 14 16 Duantity 2 4 6 8 10 12 14 16 puantity Use the graph above to answer the questions: Use the graph above to answer the questions: i. Show on the graph what curve would shift asi. Show...
Suppose a $3 per-unit tax is imposed on the sellers of this
good.
1) What is the effective price that sellers will receive for the
good after the tax is imposed?
2) What price will buyers pay for the good after the tax is
imposed?
3)How much is the burden of this tax on the buyers/sellers in
this market?
How do you calculate it? Please explain.
Price 20 18 16 14 12 10 8 6 4 D 10 12 14...
In an effort to raise revenue without hurting lower income
persons, Congress imposed an excise tax on luxury goods (viz.,
expensive cars, large yachts, furs, personal aircraft) manufactured
in the U.S. The excise tax imposed is represented on the diagram
below as Stax . The revenue government
anticipated it yielding is represented by the rectangle
P1abc (which is the tax per unit, distance ab, times
quantity Q1). The tax, however, did not work as
intended. After awhile domestic producers of...
QUESTION #1 Refer to Figure 1. Suppose a $3 per-unit tax is
imposed on the sellers of this good. How much is the burden of this
tax on the buyers in this market? What price will buyers pay for
the good after the tax is imposed? Explain clearly.QUESTION #2 Refer to Figure 1. Suppose a $3 per-unit tax is
imposed on the sellers of this good. How much is the burden of this
tax on the sellers in this market? What is...
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