i. The elasticity of demand for beer in country A is 1.8 and the elasticity of demand for beer in country B is 1.7. Suppose that the supply of beer is the same in both countries and that both countries impose the same level of tax on beer. Does the consumer in country A share more burden of tax?
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- Under which circumstances does line tax burden fall entirely on consumers?HELP ME WITH PART B PLEASE BY SHOWING IN A DIAGRAM a. The elasticity of demand for beer in country A is 1.8 and the elasticity ofdemand for beer in country B is 1.7. Suppose that the supply of beer isthe same in both countries and that both countries impose the same levelof tax on beer. Does the consumer in country A share more burden of tax?b. ii. Suppose the demand curve for sugar is Q = 60 − 3P and the supply curveis Q = 2P. Suppose the government announces a per-unit tax of 1 on theprice of sugar. What is the deadweight loss from the tax?Assume that the elasticity of demand for fanta is -0.8 while the elasticity of supply is 0.4. What is the pass-through fraction of a tax on fanta to consumers? B. Assuming a tax of K12 is applied on each bottle of fanta, how much of this will be borne by producers. C. If the original price was K30, what would be the new equilibrium price?
- Suppose the demand curve for a good is highly elastic and the supply curve is highly inelastic. If the government taxes this good, O buyers and sellers will each share 50 percent of the burden, regardless of the elasticities of the demand and supply curves. sellers will bear a larger share of the tax burden. the distribution of the burden will depend upon whether the buyers or the sellers are required to send the tax to the government. buyers will bear a larger share of the tax burden.The demand for cigarettes, which create negativeexternalities through secondhand smoke, is oftenrelatively inelastic. That is, when the price of cigarettes changes, the quantity demanded changes bya smaller portion. Using this fact, explain to whatextent you think a tax on cigarettes would fulfilleach of the goals of taxation.a. Assume that the elasticity of demand for Fanta is -0.5 while the elasticity of supply is 0.7. Assuming further that a tax of K10 is applied on each bottle of Fanta sold, how much of this will be borne by producers. b. Assume that the price of good X is K10 while that of good Y is K20. A consumer has allocated consumption between the two goods in such a way that the marginal utility of X is 15 utils and that of Y is 25 utils. Is this an optimal consumption bundle? If not, what should the consumer do to reach the optimum?
- Suppose that in Australia the price elasticity of steel demand of -1.5 and the price elasticity of steel supply is 1.2. If a tax of $50 per tonne of steel is applied, then: a. The tax burden on consumers will be greater than the tax burden on suppliers. b. The tax burden on suppliers will be greater than the tax burden on consumers. c. The tax burden on consumers will be equal to the tax burden on suppliers. d. The steel price is unlikely to be substantially affected.i. The elasticity of demand for beer in country A is 1.8 and the elasticity of demand for beer in country B is 1.7. Suppose that the supply of beer is the same in both countries and that both countries impose the same level of tax on beer. Does the consumer in country A share more burden of tax? Suppose the demand curve for sugar is Q = 60-3P and the supply curve is Q=2P. Suppose the government announces a per-unit tax of 1 on the price of sugar. What is the deadweight loss from the tax? Why do you think a policymaker and a consumer might interpret this deadweight loss differently?Suppose Jolene buys apples weekly. If the price of apples were to drop, Jolene would experience in . a decrease an increase a decrease an increase a decrease total revenue consumer surplus her budget constraint marginal utility willingness to pay Suppose the government levies a tax of $0.50 per pack on the buyers of cigarettes. Suppose also that the price elastic- ity of demand for cigarettes is 1.2 and the price elasticity of supply is 0.7. Because this tax is levied on the sale of a specifi c good, it is an excise tax. a progressive tax. a regressive tax. a proportional tax. a lump-sum tax. After this tax is levied, total surplus will , and the price received by producers (not including the tax) will . increase decrease increase decrease increase increase by exactly $0.50 fall by exactly $0.50 fall by less than $0.50 fall by less than $0.50 increase by more than $0.50 If economists were to study the tax incidence in this cigarette market, they would…
- If the government imposes a tax on a product: O the MC will rise causing the level of output to rise. the MC will rise causing the level of output to fall. O the MC will rise causing the level of output to rise. O None of these answers are correct. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.The government has imposed an indirect tax on good A and the coefficient of the priceelasticity of demand is > 1. Explain and demonstrate with the use of appropriate diagrams theeffect of this tax on both the buyer and seller? [Indicate in your diagram by shading theregions in different colours the price paid by consumer and price paid by supplierThe demand for gasoline is inelastic and the supply of gasoline is elastic. Therefore, A) the government bears most of the incidence of a tax on gasoline. O B) sellers bear most of the incidence of a tax on gasoline. c) buyers bear most of the incidence of a tax on gasoline. O Di the incidence of a tax on gasoline D) depends if the tax is imposed on sellers or on buyers.