4. Excise tax cause deadweight loss when it:
All (a,b,c) are true
Increases the quantity of the good supplied and demanded in the market
Creates an incentive for mutually beneficial exchanges to take place.
Raises the price of the good being taxed
A dead weight loss arise when the total surplus in the market decrease due to tax incidence i.e. when total traded goods in the market decrease due to tax in the market. the answer is "D". An increase in the price of the good will decrease the demand and decrease the consumer surplus or the amount of goods brought by the consumer.
4. Excise tax cause deadweight loss when it: All (a,b,c) are true Increases the quantity of...
Assume that the market for a good is in equilibrium at a price of $20 and a quantity of 100 units. After the government imposes a $5 per-unit excise tax on the good, the price that buyers pay for the good increases by $3. Which of the following are possible values for the government tax revenue and deadweight loss in the market
58. A tax placed on land (fixed) would cause a. a huge deadweight loss. b. no deadweight loss. c. landlords to not bear any of the burden of the tax, d. enough tax revenue so that all other taxes could be eliminated. When a country is on the downward-sloping side of the Laffer curves, cutting tax rates will a. lower tax revenues and increase deadweight loss. b. lower both tax revenues and deadweight loss. c. increase tax revenues and decrease...
I need help with these Mcq's please. Thank you 37. Efficiency in a market is achieved when cial planner intervenes and sets the quantity of output after evaluating buyers willingness to pay and sellers' costs the sum of producer surplus and consumer surplus is maximized all firms are producing the end at the same low cost per unit. no buyer is willing to pay more than the equilibrium price for any unit of the good. C ( 38. Total surplus...
part c: what is the deadweight loss of this tax part d: which is greater: the loss in consumer surplus or the loss in producer surplus The following graph shows the equilibrium price and quantity in the market for chewing gum in the country of Argonia. Suppcse the govemment of Argonia passes a bill to impose a tax of 6 Argonian dollars on the production of chewing gum. Market for Chewing Gum The new equilibrium price is 7.5 Argonian dollars...
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)....
True or false? (2 points) A price-discriminating monopolist will always create deadweight loss. (2 points) A monopoly market has barriers to entry and no close substitutes. (2 points) Unlike the monopolist, a monopolist creates an efficient market by payer workers less. (2 points) All else equal, the lower the price, the higher the consumer surplus. (2 points) A tax on buyers does not change the producer surplus because it is paid by consumers.
C. Quantity supplied increases at P. D. Quantity supplied decreases at P. E. None of the above is correct Question 5-15 In the durian market, the demand curve is given by P = 22 - 20s and the supply curve is given by P = 20. + 6. Answer the following questions Question 5 What is the equilibrium price? The equilibrium price is $7.00. Question 6 What is the equilibrium quantity? The equilibrium quantity is 4. Question 7 What is...
I need help with this problem 6. Quantity supplied c Supply 2. A good will have more inelastic demand, the treater the availability of close substitutes b. longer the period of time. C broader the definition of the market d more it is regarded as a luxury 3. If the price elasticity of demand for a good is 2, then a percent increase in price results in a a 2 percent decrease in the quantity demanded. b. 1 percent decrease...
All of the following statements are true about marginal cost except I. marginal cost increases as production expands. II. when marginal cost is below average cost, average cost is falling. III. when marginal cost is above average cost, average cost is constant. IV. when marginal cost meets the average total cost, the average total cost is at its minimum point. II and III I only II only III only III and IV IV only Which of the following is an...
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...