ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Generally speaking, how do taxes affect markets?
What affect does legal incidence have on economic incidence?
What effect does elasticity have on the economic incidence of taxes?
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- The division of a tax burden between Consumers and Producers is known as Tax IncidenceProducers bear the majority of a tax burden in which of the following circumstances?arrow_forwardThe following graph shows the market for the long-distance bus rides. In the absence of taxes, the equilibrium price of a ride is $5 and the equilibrium quantity is 10 million rides. Suppose that regulator levies an excise tax on bus service providers. The amount of excise tax equals $2 per ride. How much will bus service providers get per ticket after the tax is imposed? $5.50 $4 $4.50 $5arrow_forwardThe article does not mention the costs involved with the imposition of a sugary tax. Illustrate, with the use of an appropriate figure, what the deadweight loss from the imposition of a sugary tax would look like. Particularly, who would likely suffer a greater share of the deadweight loss – the consumer or producer? Why?arrow_forward
- What determines whether the buyer or seller pays the bulk of the tax?arrow_forwardHow can tax incidences have a positive and negative impact on the economy?arrow_forwardAfter economics class one day, your friend suggests that taxing food would be a good way to raise revenue because the demand for food is quite inelastic. In what sense is taxing food a “good” way to raise revenue? In what sense is it not a “good” way to raise revenue?arrow_forward
- The following graph shows the market for the long-distance bus rides. In the absence of taxes, the equilibrium price of a ride is $5 and the equilibrium quantity is 10 million rides. Suppose that regulator levies an excise tax on bus service providers. The amount of excise tax equals $2 per ride. How many rides will be demanded after the introduction of the excise tax? 7 million 10 million 8 million 9 millionarrow_forwardDoyle and Samphantharak (2008) find that when a 5% gas tax is implemented, prices consumers pay for gas increase by about 4%. What role does demand elasticity play in determining the size of this price change? That is, under what demand elasticity cases would the price change be closer to 5%, or closer to 0%? Illustrate and explain using supply-and-demand graph(s)..arrow_forwardif the government doubled the tax on gasoline,can you be sure that revenue from the gasoline tax will rise ? can you be sure that the deadweight loss from the gasoline tax will rise?arrow_forward
- Which of the following statements is correct regarding a tax on a good and the resulting deadweight loss? The greater are the price elasticities of supply and demand, the greater is the deadweight loss. The greater is the price elasticity of supply and the smaller is the price elasticity of demand, the greater is the deadweight loss. The smaller are the decreases in quantity demanded and quantity supplied, the greater the deadweight loss. The smaller is the wedge between the effective price to sellers and the effective price to buyers, the greater is the deadweight loss.arrow_forwardWhat is an indirect tax give two examples in economicsarrow_forwardinstructure.com/courses/11047/quizzes/121411/take The following graph depicts a market where a tax has been imposed. Pe was the equilibrium price before the tax was imposed, and Qe was the equilibrium quantity. After the tax, Pc is the price that consumers pay, and Ps is the price that producers receive. Qr units are sold after the tax is imposed. NOTE: The areas B and C are rectangles that are divided by the supply curve ST. Include both sections of those rectangles when choosing your answers. nº P₁ " A A B M C Q₁ Which areas represent consumer surplus before the tax is imposed? C+G+E B-C Q₂arrow_forward
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