The Ramesy rule suggest that society should

4-3  In each of the following instances, determine whether demand is elastic, inelastic, or unit-elastic. If price increases by 10 percent and quantity demanded decreases by 10 percent, demand is _______. If price decreases by 10 percent and quantity demanded increases by 5 percent, demand is _______.

P $3.00 $2.66 $2.00 18. You are in the business of producing and selling hamburgers, French fries, pizza, and ice cream. The mayor of your city plans to impose a sales tax on one of these products. Based on the elasticities: j. k. Which of these goods would your customers least like to be taxed? Which of these goods would your customers prefer to be taxed? B S₁ So 130 150 bb bb Figure two: effect of excise tax on supply and demand QUESTION #19: a) TO OU a. b. C. b) a. b. C. Before the Tax: Price the Consumer Pays = Price the Producer Receives = Quantity = After the Tax, Price the Consumer Pays = Price the Producer Receives = Tax per unit = d. Quantity = e. Total Tax Revenue = f. Proportion of the Total Tax Consumers Pay = g. Proportion of the Total Tax Producers Pay = h. Who Pays the Burden of the Tax = i. DWL = ?

The price elasticity of demand for beer among young adults (age 18 to 24) is about 1.30, and the number of highway deaths is roughly proportional to the group’s beer consumption. If a state imposes a beer tax that increases the price of beer by 20%, by how much will the number of highway deaths among young adults decrease?

The demand for money is given by Md = $Y (0.3-i), where $Y = 120 and the supply of money is $30. What is the equilibrium interest rate? If the central bank wants to decrease i by 2%, at what level should it set the supply of money?

If average movie ticket prices rise by about 5 percent and attendance falls by about 2 percent, other things being equal, the elasticity of demand for movie tickets is about: a. -0.0. b. -0.4. c. -0.6. d. -2.5.

The Indian government places a Rs. 1,000 tax on smart phones, will the price paid by consumers raise by more than Rs. 1,000, less than Rs. 1,000 or exactly Rs. 1,000? Explain.

Give typing answer with explanation and conclusion In an effort to curb planetary obesity, authorities levy a tax of $20 per unit of lunar candy. How much of this tax is borne by the sellers? That is, by how much does the seller’s price change? demand - q = 600 − 2p supply - q = 2p − 400 Equilibrium price - 250 Equilibrium Quantity- 100 Use the equation Ps= Pd+ Tax to solve ANSWER IS 10

A sales tax is imposed on good A. The supply of good A is not perfectly elastic or perfectly inelastic. Suppose that the demand for good A becomes more inelastic. (a) Will the tax burden on sellers increase or decrease? (b) Will the DWL increase or decrease?

< = X Tagssta Question 30 A B minerva.bathspa.ac.uk C There are two goods A and B. In which of the following cases will good A have the more price elastic supply? D Exam □ 2 Points A higher proportion of national income is spent on A than on B The cost of producing extra units increases more rapidly in the case of A than in the case of B Consumers find it easier to find alternatives to A than to B If it is less costly to shift from producing A to another product than it is to shift from producing B to another product