Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Question
Chapter 30.2, Problem 3RQ
To determine
Explain why consumption taxes are relevant for measuring the tax wedge.
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If the government doubles the tax on gasoline,
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Chapter 30 Solutions
Macroeconomics
Ch. 30.1 - Prob. 1RQCh. 30.1 - Prob. 2RQCh. 30.1 - Prob. 3RQCh. 30.1 - Prob. 4RQCh. 30.1 - Prob. 5RQCh. 30.2 - Prob. 1RQCh. 30.2 - Prob. 2RQCh. 30.2 - Prob. 3RQCh. 30.2 - Prob. 4RQCh. 30.2 - Prob. 5RQ
Ch. 30.3 - Prob. 1RQCh. 30.3 - Prob. 2RQCh. 30.3 - Prob. 3RQCh. 30.3 - Prob. 4RQCh. 30.3 - Prob. 5RQCh. 30.4 - Prob. 1RQCh. 30.4 - Prob. 2RQCh. 30.4 - Prob. 3RQCh. 30.4 - Prob. 4RQCh. 30.4 - Prob. 5RQCh. 30 - Prob. 1SPACh. 30 - Prob. 2SPACh. 30 - Prob. 3SPACh. 30 - Prob. 4SPACh. 30 - Prob. 5SPACh. 30 - Prob. 6SPACh. 30 - Prob. 7SPACh. 30 - Prob. 8SPACh. 30 - Prob. 9SPACh. 30 - Prob. 10SPACh. 30 - Prob. 11SPACh. 30 - Prob. 12APACh. 30 - Prob. 13APACh. 30 - Prob. 14APACh. 30 - Prob. 15APACh. 30 - Prob. 16APACh. 30 - Prob. 17APACh. 30 - Prob. 18APACh. 30 - Prob. 19APACh. 30 - Prob. 20APACh. 30 - Prob. 21APACh. 30 - Prob. 22APACh. 30 - Prob. 23APACh. 30 - Prob. 24APACh. 30 - Prob. 25APACh. 30 - Prob. 26APACh. 30 - Prob. 27APACh. 30 - Prob. 28APA
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- After the excise tax is imposed, what is the new equilibrium quantity of sofas? d. What is the total amount of revenue collected by the government from the excise tax on sofas?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_forwardWith a tax on demand (if demand is downward-sloping as it usually is) , the price that buyers pay with the tax and the price that sellers receive with the tax always increases; always increases always increases; stays the same always increases; always decreases Ostays the same; always increasesarrow_forward
- Consider the supply and demand functions graphed below. Р Demand Supply 20 50 80 100 Download the figure. Suppose a demand-side tax is imposed. As a result of the tax, the new equilibrium quantity is 50. What is the price paid by consumers? What is the price paid by producers? How much is the tax that was imposed? How much tax revenue is collected? Which side of the market pays more of the tax? This side of the market pays more of the tax because 10 LO 21 GA GAarrow_forwardwhy is the tax rate 6?arrow_forwardHow does tax affect AE line? Draw graphs to explainarrow_forward
- Suppose that the government has decided to place a $2 per litre tax on soft drinks. In this market, assuming that demand and supply curve have roughly the same responsiveness at their point of intersection, how is the incidence of the tax burden split between consumers and producers? Assuming next that the demand curve is less elastic. How does the tax incidence change?arrow_forward"We should impose a 20 percent luxury tax on expensive automobiles (those with a sales price of $75,000 or more) in order to collect more tax revenue from the wealthy." Will the burden of the proposed tax fall primarily on the wealthy? Why or why not?arrow_forwardWhen assessing the welfare effects of taxes, we can conclude that They are always welfare increasing, because they allow the government to provide essential goods They are usually welfare decreasing in the market in which they are raised, but for society as a whole it depends on how they are used They are always welfare decreasing They are welfare neutral, because whatever is lost by producers and consumers goes instead to the government and therefore is just a reallocation of moneyarrow_forward
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