Homework Answers
True
(By the fifth year, demand will become more elastic so tax revenue
will decline.)
False
(When demand becomes more elastic then deadweight loss will also
increase.)
False
(Deadweight loss is smaller when good has inelastic demand)
True
(Poor spend a higher fraction of their income on food because of
lesser income so taxing food will cause them to pay higher amount
of taxes thereby decrease their income even more. Thus, it is a bad
way to raise revenue from equality point of view.)
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Attempts: Average: /2 4. Problems and Applications Q4 Suppose that the government imposes a tax on...
Please answer why the answer is that answer Suppose the government imposes a tax on heating...
Please answer why the answer is that answer Suppose the government imposes a tax on heating oil. The deadweight loss from this tax will likely be greater in the (a) first year than in the fifth year because demand and supply will be more elastic in the first year than in the fifth year. (b) first year than in the fifth year because demand and supply will be less elastic in the first year than in the fifth year. (c)...
3. Problems and Applications Q3 Suppose the price elasticity of demand for heating oil is 0.1...
3. Problems and Applications Q3 Suppose the price elasticity of demand for heating oil is 0.1 in the short run and 0.9 in the long run If the price of heating oil rises from $1.80 to $2.20 per gallon, the quantity of heating oil demanded will by % in the long run. The change is heating oil. by % in the short run and in the long run because people can respondeasily to the change in the price of Grade...
Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely...
Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely be greater in the a. eighth year after it is imposed than in the first year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year. b. first year after it is imposed than in the eighth year after it is imposed because demand and supply will be more elastic in the first...
Suppose the government imposes a $4-per-pack tax on suppliers.
4. The Laffer curveGovernments often place so-called sin taxes on goods or services such as cigarettes and alcohol. These kinds of taxes are popular with politicians because they are usually more palatable to voters than income taxes.To understand the effect of such a tax, consider the monthly market for cigarettes, which is shown on the following graph.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this...
Suppose the government imposes a $4-per-pack tax on suppliers.
4. The Laffer curve Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections. To understand the effect of such a tax, consider the monthly market for cigarettes, which is shown on the following graph. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts...
Attempts: Score: /3 15. Problems and Applications Q8 Suppose the government reduces taxes by $20 billion,...
Attempts: Score: /3 15. Problems and Applications Q8 Suppose the government reduces taxes by $20 billion, there is no crowding out, and the marginal propensity to consume is 3/4. billion increase in aggregate demand. The total effect of the tax cut on aggregate demand is The initial effect of the tax reduction is a $ a $ billion The total effect of this $20 billion tax cut is the total effect that a $20 billion increase in government purchases would...
Suppose the government imposes a tax on labor income. Which of the following describe the effect...
Suppose the government imposes a tax on labor income. Which of the following describe the effect of the tax in the labor market? I f the demand for labor is more elastic than the supply, workers will bear more of the tax. Employment is not affected because workers need jobs. ill. The tax creates a deadweight loss. i only Ill and ili i only Oil and it i and ill only
Back to Assignment Attempts: Do No Harm: 13 4. Determinants of the price elasticity of demand...
Back to Assignment Attempts: Do No Harm: 13 4. Determinants of the price elasticity of demand Aa Aa A good with many close substitutes is likely to have relatively demand, since consumers can easily choose to purchase one of the close substitutes if the price of the good rises. Price elasticity of demand for a good depends on the price of the good relative to the consumers' incomes. Of the following goods, which one has the most elastic demand? O...
Suppose the government imposes a $20-per-bottle tax on suppliers.
Government-imposed taxes cause reductions in the activity that is being taxed, which has important implications for revenue collections.To understand the effect of such a tax, consider the monthly market for vodka, which is shown on the following graph.Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey...
Now suppose that the government imposes a $2 tax per case on the sellers of microwave...
Now suppose that the government imposes a $2 tax per case on the sellers of microwave popcorn. The graph below shows the effects of this tax. Supply Demand 100 200 300 400 500 600 700 800 900 Quantity Using the information in the graph above, identify each of the following (after the tax is imposed): e. the new equilibrium price and quantity f. price paid by buyers g. price received by sellers h. consumer surplus i. producer surplus j. government...
3. Problems and Applications Q3 Suppose the price elasticity of demand for heating oil is 0.1 in the short run and 0.9 in the long run If the price of heating oil rises from $1.80 to $2.20 per gallon, the quantity of heating oil demanded will by % in the long run. The change is heating oil. by % in the short run and in the long run because people can respondeasily to the change in the price of Grade...
Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely be greater in the a. eighth year after it is imposed than in the first year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year. b. first year after it is imposed than in the eighth year after it is imposed because demand and supply will be more elastic in the first...
Attempts: Score: /3 15. Problems and Applications Q8 Suppose the government reduces taxes by $20 billion, there is no crowding out, and the marginal propensity to consume is 3/4. billion increase in aggregate demand. The total effect of the tax cut on aggregate demand is The initial effect of the tax reduction is a $ a $ billion The total effect of this $20 billion tax cut is the total effect that a $20 billion increase in government purchases would...
Suppose the government imposes a tax on labor income. Which of the following describe the effect of the tax in the labor market? I f the demand for labor is more elastic than the supply, workers will bear more of the tax. Employment is not affected because workers need jobs. ill. The tax creates a deadweight loss. i only Ill and ili i only Oil and it i and ill only
Back to Assignment Attempts: Do No Harm: 13 4. Determinants of the price elasticity of demand Aa Aa A good with many close substitutes is likely to have relatively demand, since consumers can easily choose to purchase one of the close substitutes if the price of the good rises. Price elasticity of demand for a good depends on the price of the good relative to the consumers' incomes. Of the following goods, which one has the most elastic demand? O...
Now suppose that the government imposes a $2 tax per case on the sellers of microwave popcorn. The graph below shows the effects of this tax. Supply Demand 100 200 300 400 500 600 700 800 900 Quantity Using the information in the graph above, identify each of the following (after the tax is imposed): e. the new equilibrium price and quantity f. price paid by buyers g. price received by sellers h. consumer surplus i. producer surplus j. government...
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