How do the elasticities of supply and demand affect the deadweight loss of a tax? Why do they have this effect? Please give examples and support your answer with concepts from the textbook.
How do the elasticities of supply and demand affect the deadweight loss of a tax? Why...
The price elasticities of supply and demand affect Question 40 options: 1) both the size of the deadweight loss from a tax and the tax incidence. 2) the size of the deadweight loss from a tax but not the tax incidence. 3) the tax incidence but not the size of the deadweight loss from a tax. 4) neither the size of the deadweight loss from a tax nor the tax incidence. Previous PageNext Page
DWL = deadweight loss Suppose the elasticity of supply of cigarettes is 10. 1) Find estimates of the elasticity of demand for cigarettes, the current tax rate on cigarettes, average price, and annual quantity sold in Florida. Provide your sources. 2) How high would the price, including the tax, need to be to cut consumption by half? 3) How high would the tax have to be to push the after tax price that high? 4) Estimate the consumer and producer...
The more inelastic are demand and supply, the greater is the deadweight loss of a tax. True False
(1) Briefly explain why deadweight loss exist when a tax is imposed. Why would deadweight loss be lower if the tax is imposed on a good with inelastic demand? [3 Points)
1. Does a tax lead to a deadweight loss? Explain your answer in detail. 2. How does a tax impact consumer and producer surplus? 5. Describe how deadweight loss changes when demand is elastic and inelastic. 8. Describe how deadweight loss changes when supply is elastic and inelastic 10. Explain the difference between the benefits principle and the ability-to-pay principle.
Please tell me why the answer is what it is The size of the deadweight loss resulting from a tax is smaller when which of the following is true? (a) the larger the price elasticity of demand (b) the smaller the price elasticity of supply (c) the larger the amount of the tax (d) none of the above are correct
3. Relationship between tax revenues, deadweight loss, and demand elasticityThe government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by DC (on the first graph), and the demand for bus passes is shown by DB (on the second graph).Suppose the government taxes...
5. Describe how deadweight loss changes when demand is elastic and inelastic. 8. Describe how deadweight loss changes when supply is elastic and inelastic 10. Explain the difference between the benefits principle and the ability-to-pay principle.
Homework (Ch 08) 3. Relationship between tax revenues, deadweight loss, and demandelasticity The government is considering levying a tax of $60 per unit on suppliers of either concert tickets or bus passes. The supply curve for each of these two goods is identical, as you can see on each of the following graphs. The demand for concert tickets is shown by Dc (on the first graph), and the demand for bus passes is shown by Ds (on the second graph)....
what is the deadweight loss after the tax? I know 24 is the optimal tax. Question 3: Negative Externalities Suppose that a factory sells tchotchkes to the people of City A. The inverse demand for the tchotchkes is P = 240 - 90d while the inverse supply curve is P = 3Qs. However, the factory is upstream of City A, and production of tchotchkes creates water pollution. Marginal damages from production are MD = 24. C. Suppose the government levies...