Which of the following will cause the supply of a product to decrease? a) governent subsidy for the product b)an increase in consumer' income c) a decrease in the price of the product d)an increase in the excise tax on the product

Which of the following will cause the supply of a product to decrease? a) governent subsidy for the product b)an increase in consumer' income c) a decrease in the price of the product d)an increase in the excise tax on the product

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter5: Elasticity

Section: Chapter Questions

Problem 30CTQ: In a market where the supply curve is perfectly inelastic how does an excise tax affect the price...

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Question

4.Which of the following will cause the supply of a product to decrease?

a) governent subsidy for the product

b)an increase in consumer' income

c) a decrease in the price of the product

d)an increase in the excise tax on the product

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What is the total surplus : Price 110 - Supply 100 a) 800 b) 1000 c) 1500 d) 2000 e) 2500 f) 3500 g) 5000 90 80 70 60- Demand 50 45 40 + 30 20 10 ++++++ 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 Duantity
8. Suppose we want regular cars to be gradually replaced by electric cars. There are several kinds of government interventions that could be used to make this happen, or at least to push the car market to produce and sell more electric cars. Explain how a tax could be used for this purpose, and then explain how a subsidy could be used for this purpose.
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(b) Briefly explain why a government can raise more revenue by taxing products with inelastic demand rather than elastic demand. (c) Assume that you are working for a firm that sells a variety of products with different price elasticities. At a business meeting, a colleague says that your firm could increase its total revenue by lowering the price of all its products because it would sell more. How would you respond?