estion 1/ Figure 2 Market for Cigarettes S Tax P P E P

Consider the market described by the graph below where the vertical distance between points A and B represents a tax in the market. 22 20 10 16 14 12 10 Price Demand 100 200 300 400 500 600 700 800 900 1000 Supply Quantity The per-unit burden of the tax on buyers is $16 and the tax results in a loss of $2700 in consumer surplus. $6 and the tax results in a loss of $900 in consumer surplus $6 and the tax results in a loss of $2700 in consumer surplus. $16 and the tax results in a loss of $900 in consumer surplus. 2.5 po

a. Suppese a $0.50 tax, collected by the government from sellers, is levied on each bottle of sugary beverages. Adjust the graph to reflect this change. b. Following the tax, consumers pay a price of and the new equilibrium quantity is while sellers end up with Out of the $0.50 tax, consumers pay The disproportionate burdens of the tax reflect the fact that of the market. The deadweight loss associated with the tax is on each bottle sold, while sellers pay are the less price sensitive side

How much would the excess burden of this $12 tax be if the equation of the original supply curve had been: Supply: P = 40 +0.2Q? A) $80 B) $120 C) $140 D) $360

of a given activity. c) Economists refer to the revenue collected as a result of a tax as the burden of taxation. Economists refer to other costs imposed on society because of the tax as the burden of taxation.

The vertical distance between points A and B represents the original tax. 12+ 11+ 10 9 8 7. 6 Price 2 1 D 05 1 15 2 25 3 35 4 45 5 Quantity Refer to Figure 8-19. If the government changed the per-unit tax from $5.00 to $7.50, then the price paid by buyers would be $10.50, the price received by sellers would be $3, and the quantity sold in the market would be 0.5 units. Deadweight loss would now be a. $1.50 O b. $0.50 c. $4.0 Od. $0.625

When an excise tax is levied on sellers and they are responsible for paying the tax to the government, this will have no effect on buyers since they don’t have to directly pay the tax.   Select one: True False

Do a comparative analysis of taxation in Kenya, Uganda and Tanzania showing how these countries have addressed the following tax matters: Income tax Customs tax Excise tax Value added tax

If a $6 per unit excise (sales) tax is imposed, who will suffer the greater burden of this tax, the suppliers or demanders?     a) Demanders     b) Suppliers     c) Both share the burden equally     d) Can't tell from the available information