Homework Answers
Given,
Demand Elasticity = 0.4 , Supply Elasticity = 0.8, Specific Tax = $1.25
The tax will be divided between the consumer and producer according to the demand and supply elasticity.
The fraction of the tax paid by the Consumer = Supply elasticity / (Demand elasticity + Supply Elasticity) = 0.8/ 0.4+0.8 = 0.8/1.2
=2/3
The fraction of the tax paid by the Producer = Demand elasticity / (Demand elasticity + Supply Elasticity) = 0.4/0.4+0.8= 0.4/1.2
=1/3
Tax paid by consumer = 2/3 *1.25 = $0.833 , Tax paid by producer = 1/3 * 1.25 = $0.417
The price paid by consumer would increase by $0.833.
The amount received by producers would decrease by $0.417.
The tax incidence on the consumer is 66.67% i.e. 2/3.
Add Answer to:
Suppose the government applies a specific tax to a good where the demand elasticity, e, is-04,...
I need some help with all three parts. Please and thank you. specific tax to a...
I need some help with all three parts. Please and thank you.
specific tax to a good where the demand elasticity, e, is 1.4, and the supply elasticity, Suppose the government applies a n, is 1.6 If a specific tax, T, of $1.75 was placed on the good, to the nearest cent, what is the price increase that consumers would pay? S.93 (round your answer to two decimal places) To the nearest cent, what is the price decrease that producers...
if the demand elasticity for good X is 1.33 and the supply elasticity for X is...
if the demand elasticity for good X is 1.33 and the supply elasticity for X is .42 who will pay a greater share of a tax imposed on the market? a) producers b) consumers c) the government d) the tax will be shared equally between consumers and producers
16. If price elasticity of demand for good X is 2 and the price elasticity of...
16. If price elasticity of demand for good X is 2 and the price elasticity of supply for good X is 3; if an excise tax of $40 levied on good x, consumers will end up paying _______ and producers paying __________. $15; $25 $16; $24 $25; $15 $24; $16
. Calculating tax incidence Suppose that the U.S. government decides to charge wine producers a tax....
. Calculating tax incidence Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 50 million bottles of wine were sold every month at a price of $6 per bottle. After the tax, 44 million bottles of wine are sold every month; consumers pay $7 per bottle, and producers receive $3 per bottle (after paying the tax). The amount of the tax on a bottle of wine is s per bottle. Of this amount, the...
6. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax....
6. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 15 million cases of cola were sold every month at a price of $6 per case. After the tax, 9 million cases of cola are sold every month; consumers pay $9 per case (including the tax), and producers receive $3 per case The amount of the tax on a case of colas S p er case of this amount, the burden...
5. Calculating tax incidence Suppose that the U.5. government decides to charge beer consumers a tax....
5. Calculating tax incidence Suppose that the U.5. government decides to charge beer consumers a tax. Before the tax. 50 billion cases of beer were sold every year at a price of $7 per case. After the tax, 44 billion cases of beer are sold every year consumers pay $10 per case (including the tax), and producers receive 4 per The amount of the tax on a case of beer is 5 that falls on producers is 5 per case....
5. Calculating tax incidence Suppose that the U.S. government decides to charge wine producers a tax....
5. Calculating tax incidence Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 25 billion bottles of wine were sold every year at a price of $7 per bottle. After the tax, 18 billion bottles of wine are sold every year; consumers pay $8 per bottle, and producers receive $5 per bottle (after paying the tax). The amount of the tax on a bottle of wine is $3 per bottle. Of this amount, the...
5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax....
5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 25 billion cases of beer were sold every year at a price of $7 per case. After the tax, 19 billion cases of beer are sold every year; consumers pay $8 per case, and producers receive $4 per case (after paying the tax) The amount of the tax on a case of beer is$ per case. Of this amount, the burden...
5. Calculating tax incidence Suppose that the U.S. government decides to charge cola producers a tax....
5. Calculating tax incidence Suppose that the U.S. government decides to charge cola producers a tax. Before the tax, 30 billion cases of cola were sold every year at a price of $5 per case. After the tax, 24 billion cases of cola are sold every year; consumers pay $6 per case, and producers receive $2 per case (after paying the tax). The amount of the tax on a case of cola is _____per case. Of this amount, the burden...
Suppose the supply of a good is given by the equation QS = 80P - 80
Suppose the supply of a good is given by the equation QS = 80P - 80, and the demand for the good is given by the equation QD= 280 – 40P, where quantity (Q) is measured in millions of units and price (P) is measured in dollars per unit. The government decides to levy an excise tax of $3.00 per unit on the good, to be paid by the seller. Calculate the value of each of the following, before the tax and after...
I need some help with all three parts. Please and thank you.
specific tax to a good where the demand elasticity, e, is 1.4, and the supply elasticity, Suppose the government applies a n, is 1.6 If a specific tax, T, of $1.75 was placed on the good, to the nearest cent, what is the price increase that consumers would pay? S.93 (round your answer to two decimal places) To the nearest cent, what is the price decrease that producers...
. Calculating tax incidence Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 50 million bottles of wine were sold every month at a price of $6 per bottle. After the tax, 44 million bottles of wine are sold every month; consumers pay $7 per bottle, and producers receive $3 per bottle (after paying the tax). The amount of the tax on a bottle of wine is s per bottle. Of this amount, the...
6. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 15 million cases of cola were sold every month at a price of $6 per case. After the tax, 9 million cases of cola are sold every month; consumers pay $9 per case (including the tax), and producers receive $3 per case The amount of the tax on a case of colas S p er case of this amount, the burden...
5. Calculating tax incidence Suppose that the U.5. government decides to charge beer consumers a tax. Before the tax. 50 billion cases of beer were sold every year at a price of $7 per case. After the tax, 44 billion cases of beer are sold every year consumers pay $10 per case (including the tax), and producers receive 4 per The amount of the tax on a case of beer is 5 that falls on producers is 5 per case....
5. Calculating tax incidence Suppose that the U.S. government decides to charge beer producers a tax. Before the tax, 25 billion cases of beer were sold every year at a price of $7 per case. After the tax, 19 billion cases of beer are sold every year; consumers pay $8 per case, and producers receive $4 per case (after paying the tax) The amount of the tax on a case of beer is$ per case. Of this amount, the burden...
Most questions answered within 3 hours.
-
2) Write a C++ program that uses a class called “Degree” to
obtain the trigonometric
values...
asked 47 minutes ago -
1. In eukaryotic cells the genomes of
&
asked 46 minutes ago -
The standard enthalpy of propanol (C3H7OH) is -303.0 kJ/mol.
Compute both of the
gross and net...
asked 46 minutes ago -
Why PWM using H-bridge for control motor speed is more power
effiecient than the linear amplifier...
asked 1 hour ago -
In 1999, Carly Fiorina famously said,"I hope that we are at a
point that everyone is...
asked 1 hour ago -
Individuals in a species of moth vary in wing color from white to
black, but all...
asked 1 hour ago -
The following standards for variable manufacturing overhead have
been established for a company that makes only...
asked 1 hour ago -
The United States government wanted to determine what proportion
of Americans approve of the current president,...
asked 1 hour ago -
2-N stone is dropped from the top of a cliff. The stone hits the
ground 3...
asked 1 hour ago -
Vitamins participate in metabolic reactions in their coenzyme
forms . Match the following reactions to the respective...
asked 1 hour ago -
We have developed a new mobile device and wish to gain insight
into the price that...
asked 2 hours ago -
12.8 ml of a solution is run into an empty flask, from a buret.
The mass...
asked 1 hour ago