Greebies cost $100, and then the government puts a $50 sales tax on Greebies. (This means the tax is on the buyers). What is most likely to be the new price buyers pay? O a. $150 O b. $170 k O c. All of these are equally likely to be the new price buyers pay O d. $70 O e. $100 O f. $130
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- A. Suppose that government imposed a binding price ceiling on some good and subsequently demand for the good increased . Which of the following would be true ? O a. Quantity exchanged would increase O b. Quantity exchanged would remain the same O c. Quantity exchanged would decrease O d. Amount of excess supply would increase. B. A market outcome will be efficient only if consumers and producers share the economic surplus equally . O. True O. FalseSuppose a tax of $0.25 is placed on the market depicted below. 090 085 0.80 0.75 0.70 085 060 0.55 050 0.45 0.40 50 100 150 200 250 300 350 400 What is the DWL from the tax? O a. 8.75 O b.15 O C. 10 O d. 12.50Your state legislature is considering increasing the sales tax on two different commodities: prescription drugs and restaurant meals. You estimate owm-price elasticity of demand for prescription drugs Lo be -0.08 and uwn-price elasticity of dermard for reslaurant meals lo be -0.95. If the legislaturc's primary gnal in incrcasing taxcs is to raiscmoncy most efficiontly (i.c., minimizing the resulting deadweight loss), it should tax bullıdrugs and restaurant meals equally. drugs bccausc domand is morc pricc inclastic. reslaurant meals Lecause lhey are nol a rnecessily. only thosc prescription drugs that arc not lifc saving. restaurant meals because demand is more price elastic.
- The supply curve in a market is given by P = 3 + 2Q; demand is given by P = 11 - 2Q. Suppose a per-unit tax of £1 is levied on the sellers. The price consumers pay will and the consumer surplus will Select one: O a. O b. Increase by 1; decrease Decrease by more than 1; Increase O c. Decrease by 1; remain unchanged O d. Increase by less than 1; DecreaseWhich one of the following statement is incorrect? O A. The difference between the lowest price at which producers are willing to supply a product and the price they actually receive is known as the producer surplus O B. The producer surplus is depicted by the area below the demand curve and above the market price. O C. The value between what consumers pay and the maximum value that they are willing to pay for a product is known as the consumer surplus O D. To determine consumer surplus, one must have knowledge of the market price of a particular productA tax placed on sellers of cable TV services will the price received by buyers of cable and causes the number of subscribers to Select one: O a. reduce; decrease O b. reduce; increase O. raise; increase O d. not change; decrease O e. raise; decrease
- 3.30 3.00 2.70 2.40 2.10 1.80 1.50 1.20 0.90 0.60 0.30 50 100 150 200 250 300 350 400 O b. There will be a excess supply of 200 units O c. The ceiling is non-binding O d. There will be an excess supply of 100 units Supply Demand Suppose that a price ceiling is set at $2.70. Which of the following is true? O a. There will be a shortage of 200 units Click Save and Submit to save and submit. Click Save All Answers to save all a7. Taxation - An algebraic approach Suppose the supply of a good is given by the equation Q1,200P-1,200, and the demand for the good is given by the equation QD 2,400-400P, where quantity (Q) is measured in millions of units and price (P) is measured in dollars per unit. The government decides to levy an excise tax of $1.00 per unit on the good, to be paid by the seller. Calculate the value of each of the following, before the tax and after the tax, to complete the table that follows: 1. The equilibrium quantity produced 2. The equilibrium price consumers pay for the good 3. The price received by sellers Equilibrium Quantity (Millions of units) Equilibrium Price per Unit Paid by Consumers Price per Unit Received by Sellers Before Tax The government receives After Taxi Given the information you calculated in the preceding table, the tax incidence on consumers is on producers is per unit of the good: per unit of the good, and the tax incidence in tax revenue from levying an excise tax of…Assume the government imposes a $2.25 tax on suppliers, which results in a shift of the supply curve from $1 to 52. How much of the total tax revenue is paid by the seller? Mutiple Choice O O O $300 5675 $750
- QUESTION 8 Figure 14- 12 10 6 2 10 20 30 40 50 60 70 Refer to Figure. If the government imposed a tax of $6 per unit in this market then which of the following statements would be correct? O a. The burden of tax will fall equally on the buyers and sellers. O b. The burden of tax will fall more on the buyers. O C. The burden of tax will fall more on the sellers. O d. Neither buyer or seller will have to pay the tax. QUESTION 19 Figure 20 Trice 18 16 14 12 10 8 D 2 10 20 30 40 50 60 70 80 quantity Refer to Figure. If the government imposes a price ceiling of $6 on this market, then there will be O a. a shortage of 40 units. O b.no shortage. O C. a shortage of 30 units. o d. a shortage of 20 units.Which of the following results from a subsidy? Select one: O a. world output is increased O b. exports increase O c domestic production costs increase © d. imports increaseFirms are better off using rebates rather than just lowering the price of a good because O only those who place a low value on their time or are price sensitive actually redeem the rebate, making profits higher than if they just lowered the price. Os customers overestimate the value of the rebate and so buy more of the good, making profits higher than if they just lowered the price. Oc lowering the price is inefficient and creates additional deadweight loss. OD people view the firm in a positive light because now poorer people will be able to afford their good.