Microeconomics (2nd Edition) (Pearson Series in Economics)
2nd Edition
ISBN: 9780134492049
Author: Daron Acemoglu, David Laibson, John List
Publisher: PEARSON
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Question
Chapter 10, Problem 7Q
To determine
The meaning of tax incidence and the division of tax burden among the seller and the buyer.
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How a tax burden is divided between consumers and producers is called tax incidence. Consumers bear most of the tax burden when:
Suppose the California legislature passed a sweeping law to lower the number of regulations for building homes such as increasing the parking requirements and setback requirements.
Suppose there is a housing tax.
What is the effect of this law on the PES for housing?
What effect would this law have on the tax burden for buyers?
Suppose the California legislature passed a sweeping law to lower the number of regulations for building homes such as decreasing the parking requirements and setback requirements.
Suppose there is a housing tax.
What is the effect of this law on the PES for housing?
What effect would this law have on the tax burden for buyers?
Chapter 10 Solutions
Microeconomics (2nd Edition) (Pearson Series in Economics)
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- What is the nature of the deadweight loss accompanying taxes? Why is it often referred to as an excess burden?arrow_forwardGenerally 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?arrow_forwardIf tax incidence is not affected by whether the government makes buyers or sellers pay the tax then which factors determine the tax incidence?arrow_forward
- Certain items, such as gasoline, air travel, hunting equipment, cigarettes, andtelecommunications services, have a special tax added to the purchase price. What is the name ofthis tax?arrow_forwardAccording to Ibn Hazm, when zakah collection is not sufficient to satisfy the basic needs of the poor, tax should be levied upon the wealthy Muslims. Explain how Ibn Hazm’s idea of ‘extra taxation’ or ‘supplementary tax’ for the fulfilment of basic needs can be introduced in modern times? Apply a simple working mechanism for that additional tax in Malaysiaarrow_forwardHow does who a tax is imposed on impact who bears the burden of the tax? If a $3 tax is imposed on sellers of coca-cola and the supplier ends up paying $2.50 of the tax, what do we know about this market?arrow_forward
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