Homework Answers
When demand is inelastic and supply is elastic then the larger tax burden is on buyers.
This is because demand is less elastic than supply.
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The graph below shows a hypothetical market for salt. Suppose that an excise or commodity tax...
The graph below shows the market for office rental space. A $400 per month excise tax...
The graph below shows the market for office rental space. A $400
per month excise tax is imposed on firms selling office space. D is
the demand curve, S1 is the supply curve in the absence of the tax,
and S2 represents the supply curve that includes the tax.
The graph below shows the market for office rental space. A $400 per month excise tax is imposed on firms selling office space. D is the demand curve, S1 is the...
If elasticity of demand is 0.3, elasticity of supply is 0.3, and a 20% excise tax...
If elasticity of demand is 0.3, elasticity of supply is 0.3, and a 20% excise tax is levied on the good: All of the burden falls on consumers. The tax burden on suppliers and the tax burden on consumers will be equal. The tax burden on suppliers will be greater than the tax burden on consumers. The tax burden on consumers will be greater than the tax burden on suppliers. The tax burden on suppliers and the tax burden on...
Question 5 1 pts Assuming that a $500 excise tax is imposed in a market. The...
Question 5 1 pts Assuming that a $500 excise tax is imposed in a market. The consumer share of the actual tax incidence turns out to be $100, while the producers' share of the tax burden turns out to be $400. O This implies that supply is relatively more elastic than demand This implies that demand is relatively more elastic than supply O Tax Burden and elasticity are unrelated concepts.
If a $5 tax on each pack of cigarettes causes the market price of cigarettes to...
If a $5 tax on each pack of cigarettes causes the market price of cigarettes to increase by $2.50 then which of the following statements is true? consumers must be more elastic than producers consumers must be less elastic than producers consumers and producers must be equally elastic Question 42 (1 point) If the elasticity of demand is -1.8 and the elasticity of supply is 1, then consumers are than producers and the relative consumer burden will equal . Hint:...
11. The goals of optimal income taxation include all of the following EXCEPT: a. maximizing tax...
11. The goals of optimal income taxation include all of the following EXCEPT: a. maximizing tax revenue. b. minimizing the distortions due to taxation. c. maximizing the nation's social welfare function. d. achieving vertical equity. 12. Suppose that the elasticities of demand for apples, bananas, and peaches are –0.9, –1.6, and –0.8, respectively. Assume that all else is identical in these three products and that an identical tax is levied on each good. Rank the products from highest to lowest...
In which of the following cases will the tax burden be the largest on the consumers?...
In which of the following cases will the tax burden be the largest on the consumers? The unit tax is $3 on buyers, and the demand and supply are equally elastic The unit tax is $1 on buyers and $2 on sellers, and the demand is less elastic than the supply The unit tax is $3 on sellers, and the demand is more elastic than the supply The unit tax is $1 on buyers and $2 on sellers, and the...
Suppose that the demand for apples is perfectly elastic and the government levies a tax on...
Suppose that the demand for apples is perfectly elastic and the government levies a tax on the producers of apples. Assume that the supply of apples is neither perfectly elastic nor perfectly inelastic. 1. How will the price paid by consumers change? Is this change bigger or smaller than the price change that would result if the demand for apples were not perfectly elastic? 2. How will the quantity of apples consumed change because of the tax? Is this change...
The following graph shows the daily market for wine. Suppose the government institutes a tax of...
The following graph shows the daily market for shoes. Suppose the government institutes a tax of $11.60 per pair. This places a wedge between the price buyers pay and the price sellers receive. Fill in the following table with the quantity sold, the price buyers pay, and the price sellers receive before and after the tax. Using the data you entered in the previous table, calculate the tax burden that falls on buyers and on sellers, respectively, and calculate the price elasticity...
6. Effect of a tax on buyers and sellers The following graph shows the daily market...
6. Effect of a tax on buyers and sellers The following graph shows the daily market for shoes. Suppose the government institutes a tax of $11.60 per pair. This places a wedge between the price buyers pay and the price sellers receive. Supply Tax Wedge PRICE (Dollars per pair) Demand 0 100 200 800 900 1000 300 400 500 600 700 QUANTITY (Pairs of shoes) Fill in the following table with the quantity sold, the price buyers pay, and the...
QUESTION 6 The deadweight loss associated with a per-unit tax will be small relative to the...
QUESTION 6 The deadweight loss associated with a per-unit tax will be small relative to the tax revenue collected if: supply and demand are both elastic. O A. supply and demand are both inelastic. OB. supply is elastic, demand is inelastic. OC demand is elastic, supply is inelastic. OD. QUESTION 7 Consider the following statements when answering this question 1. It is not possible to help consumers by simply shifting taxes from consumers paying them to producers paying them. II....
The graph below shows the market for office rental space. A $400
per month excise tax is imposed on firms selling office space. D is
the demand curve, S1 is the supply curve in the absence of the tax,
and S2 represents the supply curve that includes the tax.
The graph below shows the market for office rental space. A $400 per month excise tax is imposed on firms selling office space. D is the demand curve, S1 is the...
If elasticity of demand is 0.3, elasticity of supply is 0.3, and a 20% excise tax is levied on the good: All of the burden falls on consumers. The tax burden on suppliers and the tax burden on consumers will be equal. The tax burden on suppliers will be greater than the tax burden on consumers. The tax burden on consumers will be greater than the tax burden on suppliers. The tax burden on suppliers and the tax burden on...
Question 5 1 pts Assuming that a $500 excise tax is imposed in a market. The consumer share of the actual tax incidence turns out to be $100, while the producers' share of the tax burden turns out to be $400. O This implies that supply is relatively more elastic than demand This implies that demand is relatively more elastic than supply O Tax Burden and elasticity are unrelated concepts.
If a $5 tax on each pack of cigarettes causes the market price of cigarettes to increase by $2.50 then which of the following statements is true? consumers must be more elastic than producers consumers must be less elastic than producers consumers and producers must be equally elastic Question 42 (1 point) If the elasticity of demand is -1.8 and the elasticity of supply is 1, then consumers are than producers and the relative consumer burden will equal . Hint:...
In which of the following cases will the tax burden be the largest on the consumers? The unit tax is $3 on buyers, and the demand and supply are equally elastic The unit tax is $1 on buyers and $2 on sellers, and the demand is less elastic than the supply The unit tax is $3 on sellers, and the demand is more elastic than the supply The unit tax is $1 on buyers and $2 on sellers, and the...
6. Effect of a tax on buyers and sellers The following graph shows the daily market for shoes. Suppose the government institutes a tax of $11.60 per pair. This places a wedge between the price buyers pay and the price sellers receive. Supply Tax Wedge PRICE (Dollars per pair) Demand 0 100 200 800 900 1000 300 400 500 600 700 QUANTITY (Pairs of shoes) Fill in the following table with the quantity sold, the price buyers pay, and the...
QUESTION 6 The deadweight loss associated with a per-unit tax will be small relative to the tax revenue collected if: supply and demand are both elastic. O A. supply and demand are both inelastic. OB. supply is elastic, demand is inelastic. OC demand is elastic, supply is inelastic. OD. QUESTION 7 Consider the following statements when answering this question 1. It is not possible to help consumers by simply shifting taxes from consumers paying them to producers paying them. II....
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