Assume the supply elasticity of a product is 1 and the price elasticity of demand is...
Assume the supply elasticity of a product is 1 and the price elasticity of demand is 2. To alleviate the effects of a negative externality, the government places a $2 per unit tax on this market, who will bear the larger burden of the tax?
Homework Answers
The price elasticity of demand is 2 which is greater than the price elasticity of supply of 1 so after a tax, the customers would bear the larger burden of the tax.
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Assume the supply elasticity of a product is 1 and the price
elasticity of demand is...
The price elasticity of supply for a product is 3, while the price elasticity of demand...
The price elasticity of supply for a product is 3, while the price elasticity of demand is -1. In equilibrium, price is 6 (in hundreds of dollars) and quantity consumed is 2 (in thousands of units). (a) Assuming supply and demand are linear, reconstruct and draw the supply and demand curves. Label the intercepts. (b) If a subsidy of $1 per unit is imposed what are PB and PS after the subsidy? What is the new equilibrium quantity? Illustrate them...
Microeconomics question 1. Price elasticity of supply and price elasticity of demand are likely to be...
Microeconomics question 1. Price elasticity of supply and price elasticity of demand are likely to be __________ in the __________ than in the __________. Select one: a. higher; short run; long run b. lower; long run; short run c. higher; long run; short run d. lower; past; future e. higher; past; future 2. If demand for a product is perfectly inelastic, a tax of $1 per unit imposed on sellers will Select one: a. not affect the market price of...
2. When the price elasticity of demand is low and the price elasticity of supply is...
2. When the price elasticity of demand is low and the price elasticity of supply is high, the burden of an excise tax falls primarily on: Consumers Producers None of the above Equally divided
I need help solving this Asap. thanks alot. Figure 1: Supply and Demand in the Market...
I need help solving this Asap. thanks alot.
Figure 1: Supply and Demand in the Market for a Good Price ($/unit) 35 27 Supply 23 19 15 13 11 9 Demand 5 13 17 Quantity (units) 11 12 10 8 6 14. Refer to Figure 1. At the market equilibrium, total consumer surplus is $10 b. $50 а. $100 d. $200 15. Refer to Figure 1. Holding the supply curve fixed, assume demand increased, which caused the equilibrium price to...
In some markets, certain products are sold. Price elasticity of supply exceeds demand elasticity (price elasticity...
In some markets, certain products are sold. Price elasticity of supply exceeds demand elasticity (price elasticity of demand). Now, value added tax is added to the product. Which of the following is correct? Choose one: a. Manufacturers and consumers bear the same amount of tax. b. Consumers fully pay the tax. c. Consumers carry more of the tax than manufacturers. d. Manufacturers carry more of the tax than consumers. e. Manufacturers pay the tax in full.
Panel (a) Price Panel (b) Supply Supply Demand Demand 1 2 3 4 5 6 7 8 Quantity 1 2 3 4 5 6 7 8 Quantity 6. In which...
Panel (a) Price Panel (b) Supply Supply Demand Demand 1 2 3 4 5 6 7 8 Quantity 1 2 3 4 5 6 7 8 Quantity 6. In which of the panels in the figure do the buyers bear the greater tax incidence, and why is this? a) Panel(a), because the demand curve is relatively less elastic, meaning consumers are less willing to bear the burden of the tax. b) Panel (b), because the demand curve is relatively less...
2. Assume that elasticity of demand for pesticides is -0.6, and elasticity of supply of pesticides...
2. Assume that elasticity of demand for pesticides is -0.6, and elasticity of supply of pesticides is 1.2. If the government imposes a $4 tax on each product sold, what share (in dollars) of tax will be paid by buyers, and what share (in dollars) will be paid by sellers?
. Suppose the supply of housing construction is infinitely elastic at a price of $150 per...
. Suppose the supply of housing construction is infinitely elastic at a price of $150 per square foot. Currently 1 million sqare feet are built per month. If the price elasticity of demand for housing is 1, calculate the monthly excess burden of a 10 percent tax on housing construction. What is the monthly excess burden if the tax is 20 percent? Who will bear the incidence of the tax?
Please help with these questions.. thank you. Price ($/unit) Supply Demand OL 10 11 12 13 17 Quantity (units) 18. Re...
Please help with these questions.. thank you.
Price ($/unit) Supply Demand OL 10 11 12 13 17 Quantity (units) 18. Refer to Figure 1. Suppose a tax of $6 per unit is imposed on sellers in this market. What is the total loss of consumer surplus resulting from this tax? a $18 b. $32 C. $36 d. $48 19. Refer to Figure 1. Suppose a tax of $6 per unit is imposed on sellers in this market. Which is correct?...
25) What is measured by the price elasticity of supply? A) The price elasticity of supply...
25) What is measured by the price elasticity of supply? A) The price elasticity of supply measures how responsive producers are to changes in the price of other goods. B) The price elasticity of supply measures how responsive producers are to changes in income. C) The price elasticity of supply measures how responsive producers are to changes in the price of a product. D) The price elasticity of supply is a measure of the slope of the supply curve. E)...
I need help solving this Asap. thanks alot.
Figure 1: Supply and Demand in the Market for a Good Price ($/unit) 35 27 Supply 23 19 15 13 11 9 Demand 5 13 17 Quantity (units) 11 12 10 8 6 14. Refer to Figure 1. At the market equilibrium, total consumer surplus is $10 b. $50 а. $100 d. $200 15. Refer to Figure 1. Holding the supply curve fixed, assume demand increased, which caused the equilibrium price to...
In some markets, certain products are sold. Price elasticity of supply exceeds demand elasticity (price elasticity of demand). Now, value added tax is added to the product. Which of the following is correct? Choose one: a. Manufacturers and consumers bear the same amount of tax. b. Consumers fully pay the tax. c. Consumers carry more of the tax than manufacturers. d. Manufacturers carry more of the tax than consumers. e. Manufacturers pay the tax in full.
Panel (a) Price Panel (b) Supply Supply Demand Demand 1 2 3 4 5 6 7 8 Quantity 1 2 3 4 5 6 7 8 Quantity 6. In which of the panels in the figure do the buyers bear the greater tax incidence, and why is this? a) Panel(a), because the demand curve is relatively less elastic, meaning consumers are less willing to bear the burden of the tax. b) Panel (b), because the demand curve is relatively less...
2. Assume that elasticity of demand for pesticides is -0.6, and elasticity of supply of pesticides is 1.2. If the government imposes a $4 tax on each product sold, what share (in dollars) of tax will be paid by buyers, and what share (in dollars) will be paid by sellers?
. Suppose the supply of housing construction is infinitely elastic at a price of $150 per square foot. Currently 1 million sqare feet are built per month. If the price elasticity of demand for housing is 1, calculate the monthly excess burden of a 10 percent tax on housing construction. What is the monthly excess burden if the tax is 20 percent? Who will bear the incidence of the tax?
Please help with these questions.. thank you.
Price ($/unit) Supply Demand OL 10 11 12 13 17 Quantity (units) 18. Refer to Figure 1. Suppose a tax of $6 per unit is imposed on sellers in this market. What is the total loss of consumer surplus resulting from this tax? a $18 b. $32 C. $36 d. $48 19. Refer to Figure 1. Suppose a tax of $6 per unit is imposed on sellers in this market. Which is correct?...
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